Investors Up Their Bets As SA’s Top Digital Bank Invades Asian Markets

TymeBank, a well-known South African digital banking platform, continues to turn heads with its rapid growth and international expansion, bolstered by significant backing from African Rainbow Capital (ARC).

In a strategic move, ARC, famously helmed by billionaire Patrice Motsepe, recently injected an additional ZAR 169 M (~USD 9.5 M) into TymeBank, reaffirming its confidence in the digital bank’s long-term prospects.

This investment comes at a crucial time for TymeBank, which achieved profitability in December 2023 after a period of sustained growth. Now, ARC’s support not only strengthens the bank’s financial foundation but also signals investor confidence in its ambitious plans to penetrate global markets.

Strong Local Footing

In South Africa, TymeBank has rapidly established itself as a key player in the digital banking space, boasting a customer base that has swelled to over 9.5 million. The bank has leveraged its extensive retail partnerships with Pick n Pay, Boxer, and The Foschini Group (TFG) to create the largest cash-in and cash-out network in the country.

Financial metrics also reflect this success. TymeBank’s deposits surged 59% to ZAR 6.5 B (~USD 368.5 M), per the latest results of ARC, a majority shareholder, while merchant credit advances rose to ZAR 1.8 B (~USD 102 M). These figures have been bolstered by its lean, tech-driven operational model.

According to ARC’s year-end report, TymeBank’s “net operating income tripled year-on-year, while costs increased by only 10%,” highlighting the scalability of its technology infrastructure.

Global Ambitions: The Philippines and Beyond

While TymeBank has firmly rooted itself in South Africa, its ambitions extend far beyond. Through its parent company, Singapore-based Tyme Global, the bank is making strides in Asia. Tyme Global launched GOtyme in the Philippines in November 2022, and the new venture has rapidly gained traction, amassing 3.6 million customers in just 18 months.

The GOtyme model is similar to TymeBank’s, emphasising digital onboarding, low fees, and convenient cash-in and cash-out options. This success underscores Tyme Global’s ability to replicate TymeBank’s core model in new markets, proving its scalability and adaptability to different economic conditions.

Further affirming its foothold in the Philippines, GOtyme recently acquired Savii, a payroll lender, to deepen its offering and leverage the growing deposit base in the country. This move aligns with TymeBank’s strategy of expanding its services beyond traditional banking, offering products that cater to both retail consumers and businesses.

Vietnam and Indonesia in the Pipeline

Tyme Global isn’t stopping with the Philippines. It is now piloting a merchant cash advance product in Vietnam, the third market in its expansion plan. Additionally, plans are underway for a market entry into Indonesia by the end of 2024. These developments signal a calculated push into Southeast Asia, where digital banking services are gaining momentum.

Growth in these international markets appears to be more robust than what has been observed in South Africa. ARC noted that “the model’s growth trajectory is strong, with rates exceeding those of South Africa, and deposits growing faster than anticipated.” With these emerging markets becoming hotbeds for digital financial services, Tyme Global’s expansion could serve as a major revenue driver for the broader Tyme group.

Investors See Long-Term Potential

ARC’s decision to invest additional capital into TymeBank is a clear vote of confidence in its growth trajectory. This follows its earlier investment in Retail Capital, a South African company integrated into both TymeBank and GOtyme after a ZAR 1.5 B (~USD 85 M) acquisition in December 2022. Retail Capital has bolstered TymeBank’s merchant credit offering, contributing to its growing loan book.

ARC’s optimism appears to be well-founded. In its financial report, the firm projected fair value gains of ZAR 1,181 million from TymeBank’s performance, reflecting not just its past success but also its anticipated future earnings.

TymeBank’s strategic focus on operational efficiency—demonstrated by the tripling of net operating income despite a modest rise in costs—has laid the groundwork for sustained profitability. And with Tyme Global expected to break even by Q4 2025, the international ventures offer significant upside for investors.

A Balanced Approach to Growth

TymeBank’s story is one of balancing aggressive expansion with operational discipline. By keeping a tight lid on costs and leveraging scalable technology, the bank has built a sustainable model that it seeks to replicate in diverse markets.

While the growth figures are promising, challenges remain, particularly as Tyme Global enters new territories like Vietnam and Indonesia. Competition in Southeast Asia’s digital banking sector is fierce, and regulatory hurdles can be significant. Yet, if its success in the Philippines is any indicator, Tyme Global is well-positioned to navigate these challenges.

For investors, TymeBank represents a unique proposition. It has successfully disrupted the traditional banking model in South Africa and is now taking that formula global. As ARC’s continued investments suggest, the bank’s ability to scale and innovate has the potential to deliver long-term value both in Africa and beyond.