We were intrigued to learn that the biggest investor in this round of funding for Tyme was none other than Nubank, the massive Brazilian online lender. Nubank invested US$150 million, while M&G’s Catalyst contributed US$50 million and Tyme’s existing shareholders provided US$50 million.
In a news release, Coen Jonker commented on Nubank’s investment: “We are excited by the value that Nubank’s thought partnership and advice can bring to Tyme particularly in areas such as data analytics, credit risk management, product development and marketing – levers we believe are key to achieving leadership in our markets,” he said.
The new funding caps off what has been a strong year for TymeBank. On Oct. 1, TymeBank announced several milestones. First, it said that it now holds close to R7 billion (US$402.5 million) in customer deposits. Second, it said that it has disbursed more than R12 billion (US$600 million) to more than 80,000 small businesses.
Tyme launched in 2019 after securing the first commercial banking license issued in South Africa since 1999. It quickly accrued customers by undercutting incumbents on fees and signing up customers through in-store kiosks in a large supermarket chain. That business strategy has since been named “phygital,” and focuses on collaborations with major retailers such as Pick n Pay, Boxer, and TFG. While many digital banks highlight rapid customer acquisition, TymeBank appears to be an outlier with its presence in several emerging markets and a strong balance sheet.
Another distinguishing aspect of TymeBank’s business model is the strategic overseas expansion by its parent company Tyme Group. This expansion has been highly targeted, to date being best known for a digital bank it set up in the Philippines. As of August 2024, GoTyme Bank – a joint venture with local partners in the Philippines – had roughly 3 million users and PHP 17.3 billion in deposits.
While profitability is likely several years away, the Philippine market is widely underbanked – with lots of opportunities for savvy online lenders to grow market share.
TymeBank is also planning to go public, but not for several years. Jonker expects that by 2028, the bank will have reached a certain maturity, with profitability in its initial markets. “At that point, it will make sense for us to no longer rely on private equity funding,” he said.