TymeBank Targets Billion-Dollar Valuation Amid New Markets Push

TymeBank, South Africa’s fast-rising digital challenger bank, is setting its sights on new market segments and a coveted tech unicorn status, with outgoing CEO Coen Jonker aiming for a valuation close to USD 1 B in ongoing fundraising discussions en route to a target of going public at home and abroad.

“We are currently valued at close to USD 1 B and are busy with our Series D capital raise at a unicorn valuation,” Jonker said in an update. “Our target is to list TymeBank in New York by 2028, and we will most likely also do a second listing on the Johannesburg Stock Exchange for our South African shareholders.”

Behind TymeBank’s glossy veneer of rapid growth lies a story steeped in strategic calculations and the realities of Africa’s unbanked population.

Launched in 2019, TymeBank aimed to disrupt South Africa’s traditional banking landscape by focusing on the underbanked segment. Their winning formula? A hybrid approach. An eye-catching statistic emerged in 2022: a staggering 80% of TymeBank’s then 5.3 million customers signed up at kiosks within retail chains such as Pick n Pay and Boxer stores, not through digital channels.

This highlights a crucial insight – for Africa’s unbanked population, physical touchpoints remain essential for trust and accessibility.

TymeBank’s growth has been remarkable, reporting profitability earlier this year despite contending with significant losses in the period prior. The neobank has secured over USD 260 M in funding, with their most recent pre-Series C round in May 2023 led by Norrsken22 and Blue Earth Capital. This significant war chest fuels their expansion plans not just in South Africa, but also in the Philippines with their GoTyme brand.

The Tencent-backed fintech also boasts strategic distribution partnerships with relevant institutions like The Foschini Group and the Zion Christian Church, as well as a sizeable lending portfolio, driven by its Merchant Cash Advance product. Its buy-now-pay-later product MoreTyme is a notable player in South Africa’s active BNPL space.

However, TymeBank isn’t resting on its laurels. Incoming CEO Karl Westvig has signalled a strategic shift: targeting South Africa’s burgeoning middle class. TymeBank initially only catered to South Africa’s lower-income segments; however, it now plans to also appeal to higher-earning groups.

This move, as Westvig himself mentioned in a recent interview with Business Times, is about “ensuring the product offering is valuable to the mass affluent segment.” This could involve short-term lending products, credit cards, and a focus on unsecured lending – all aimed at long-term, sustainable growth.

However, replicating its success in these new segments, as well as new markets like Southeast Asia, will require navigating different competitive landscapes and regulatory requirements. Additionally, ensuring a smooth transition to catering to the middle class while retaining a focus on their core underbanked customer base will be crucial.

Nevertheless, TymeBank’s success offers valuable lessons. Their hybrid model, efficient account opening process, and strategic partnerships are notable strengths that have aided their rise. And the company’s ability to navigate regulatory hurdles, adapt their model to new markets, and cater to an expanded customer base could ultimately be decisive.