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Nubank, the world’s biggest digital bank by market value, is planning to invest $150mn in Tyme Group, valuing the neobank launched in South Africa at $1.5bn and helping to finance its push into south-east Asia.
The cash injection will bring Tyme into a select club of Africa-related “unicorns” — start-ups valued at above $1bn — and underline Nubank’s growing reach outside Latin America.
It also highlights a trend in which start-ups have migrated models launched in Africa to other regions, and vice versa.
TymeBank was launched in 2019 with the backing of Patrice Motsepe, one of South Africa’s richest men. It launched GoTyme, its Philippines bank, last year and is planning to open a digital bank in Vietnam, where it already employs 300 technology staff, next year.
At the end of June, Motsepe’s African Rainbow Capital valued its stake of just over half of Tyme at about R4.5bn ($250mn). The bank turned its first profit at the end of 2023. Chinese internet group Tencent is also an investor.
Nubank’s acquisition of a 10 per cent stake in Tyme is part of a $250mn series D capital raise in which M&G Catalyst, part of UK asset manager M&G, is investing $50mn. Existing shareholders will put up another $50mn.
Tyme originally focused on low-income South Africans in townships before it pivoted to acquiring better-off customers in South Africa and south-east Asia.
Coen Jonker, Tyme’s co-founder and chief executive, told the Financial Times that Nubank’s investment was an endorsement from “the most successful digital bank in history”.
Since a 2013 launch and listing in 2021, Nubank, has grown to a market capitalisation of $56bn.
Jonker said Tyme was preparing for a listing, most likely in New York, by the end of 2028, although he did not rule out it being acquired, with Nubank an obvious potential buyer.
Jonker said Tyme wants to become a top three retail bank in South Africa “by most measures” within three years, but competitors are concerned about whether it can make money from low-income depositors, many of whom are on government grants or unemployed.
Sim Tshabalala, chief executive of Standard Bank, South Africa’s largest bank by assets, questioned Tyme’s ability to entice more well-off customers and said it was employing “guerrilla marketing” tactics to raise its profile.
Tyme, which claims 10mn customers in South Africa and 5mn in the Philippines, aims to gain 18mn more in the next three years.
Tyme offers zero-fee debit cards and digital bank accounts at kiosks in South African retailers Pick n Pay and Boxer, and has exported that model to the Philippines by partnering with the Gokongwei Group, which operates the Robinsons retail outlets.
Leslie Maasdorp, chief executive designate of British International Investment, the UK’s development institution, which has invested a cumulative $33mn in the bank, said Tyme was “demonstrating that African companies can go global”.
African start-ups that have expanded to other markets include Paga, a Nigerian digital mobile money company that has set up in Mexico and the Philippines, and Swvl, a mass-transit app with services across Africa as well as in Pakistan and Saudi Arabia.
Lexi Novitske, general partner at Norrsken22, an Africa-focused growth fund and another early investor in Tyme, said the bank’s challenge was to convert existing depositors into “quality credit customers”.
Additional reporting by Joseph Cotterill in London
https://www.ft.com/content/9e1bdfe8-15e9-4688-9299-3e99bae0112c
