The Moves That Made Unicorn-Hopeful TymeBank Profitable Ahead Of Time

By  |  January 18, 2024

TymeBank, a prominent South African digital bank, achieved a significant financial breakthrough, reaching profitability in December 2023, the company has revealed, less than five years since its launch in February 2019. The bank now boasts the enviable feat of becoming the first digital bank in South Africa and the entire continent to break even, according to a press release seen by WT.

The achievement is particularly noteworthy considering that globally, less than half of the top 100 digital banks are profitable, with fewer than 5 percent of neobanks worldwide reaching profitability, according to recent studies cited by the bank’s leadership in the release. In comparison, TymeBank’s accomplishment stands out, with CEO Coenraad Jonker highlighting the achievement as a South African success story.

Earlier hints of a wobble appear to have subsided as the challenger bank hits an important milestone. TymeBank attributes its success to a combination of strategic factors, including its distinctive model of blending digital channels with in-store kiosks at major retailers, leading to a consistent acquisition of approximately 150,000 customers each month. The bank has fostered relationships with key partners such as Pick n Pay, Boxer, The Foschini Group (TFG), and the Zion Christian Church (ZCC).

The bank’s lending portfolio experienced a robust ~30 percent year-on-year growth, propelled by Merchant Cash Advance, financing over 50,000 SMEs across South Africa, the company claims. TymeBank’s innovative approach, underscored by product launches such as the most affordable banking offering in the country, a record-breaking fixed deposit savings rate of 11 percent, and pioneering initiatives like interest-free Grant Advance for social grant recipients and healthcare insurance collaboration with the National Healthcare Group, has been pivotal in its success.

TymeBank also eyes unicorn status with a USD 100 million funding target this year, according to Bloomberg, aiming to surpass its current valuation of USD 965 M. CEO Coenraad Jonker anticipates crossing the USD 1 B mark. The bank plans to use some of the funds in Q2 to enter the fast-growing Vietnamese market.

CEO Jonker expressed pride in the bank’s achievements, emphasizing that TymeBank has overcome challenges by remaining focused on its mission of providing affordable, accessible, and quality banking services to South Africans

Thabani Jali, TymeBank Chairperson emphasised gratitude for investor faith in the bank’s vision. Dr. Patrice Motsepe, Founder and Chairman of major shareholder African Rainbow Capital (ARC), hailed the achievement as the result of dedicated effort and strategic investments. Looking ahead, Jonker expressed excitement about the future, asserting the bank’s goal to become one of the top three retail banks in the country.

Backed by over USD 300 M in funding from notable local and global investors, including African Rainbow Capital (‘ARC’). Other investors include Apis Growth Fund II (‘Apis’), Tencent, and British International Investment (BII), TymeBank currently boasts a customer base of over 8.5 million, as well as over 1000 kiosks and 15,000 retail points in retail stores across the country, and looks on track to hit further milestones.

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