TymeBank secures new funding to drive expansion

TymeBank, the innovative South African digital bank, has made headlines with its recent successful capital raise of $77 million dollars, which equates to around one and a half billion rand. The bank has attracted two new international investors, Norrsken22, an Africa-focused tech growth fund, and Blue Earth Capital, an independent global impact investment firm. Coenraad Jonker, CEO at TymeBank, revealed that the investors have acquired a significant portion of the funding round, positioning themselves as the eighth and ninth largest investors on the company's cap table. The capital raise was conducted through the bank's holding structure in Singapore, highlighting the bank's global expansion strategy. In a recent interview with CNBC Africa, Jonker discussed the timing and the implications of the capital raise amidst the challenging economic environment in South Africa. Despite the prevailing sentiment affecting capital raises in the region, Jonker emphasized that the funds raised were not solely designated for South Africa but also for the bank's operations in the Philippines and its international expansion efforts. With a customer base of 7 million and adding approximately a million new customers every quarter, TymeBank's growth trajectory remains impressive. The allocation of the funds will primarily focus on expanding TymeBank's transactional banking, savings, and lending offerings in South Africa. The acquisition of Retail Capital last year has significantly boosted the bank's lending portfolio, particularly in providing merchant advances to small businesses. Additionally, the bank aims to accelerate its presence in the Philippines, a rapidly growing market, by signing on 150,000 new customers and expanding its lending products. Despite the challenging economic climate in South Africa, TymeBank's existing customers, particularly small businesses, have demonstrated resilience. Jonker acknowledged the tough conditions faced by businesses but expressed confidence in the customer base's ability to weather the storm. The bank remains vigilant and closely monitors its loan book performance to mitigate any risks. Looking ahead, Jonker outlined the bank's future ambitions, including further expansion into Southeast Asia with Vietnam as a potential market entry in 2024. The capital raise will also facilitate share buybacks, with approximately $12 million allocated for this purpose to allow early investors to exit profitably. In conclusion, TymeBank's successful capital raise showcases investor confidence in the bank's growth prospects and its ability to navigate a challenging economic landscape. With a strategic focus on expanding its offerings in South Africa, the Philippines, and potentially Vietnam, TymeBank is poised for continued growth and success in the digital banking space.