Digital bank Tyme Group gets unicorn status

Digital bank Tyme Group has reached unicorn status with a $1.5 billion (R26.7 billion) valuation after securing US$250 million in its latest capital raise.

Tyme achieved its unicorn status thanks to strategic investor Nubank, one of the world’s largest digital financial services platforms, to fuel its next phase of growth. Patrice Motsepe’s African Rainbow Capital remains Tyme’s majority shareholder.

Nubank is one of the world’s largest digital financial service platforms, with over 110 million customers and joins Tyme’s shareholder base along with M&G’s Catalyst as the second new shareholder.

Tyme, which has its roots in South Africa, is one of the fastest-growing digital banks in emerging markets, with over 15 million customers across South Africa and the Philippines. TymeBank, with its 10 million customers, is the group’s flagship bank and the first digital bank to reach profitability in Africa.

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Nubank brings expertise and resources to Tyme Group

The Nubank partnership brings significant expertise and resources to Tyme, positioning the company well to expand its market presence, Coen Jonker, founder and CEO of Tyme Group, says.

“Nubank transformed financial services in Brazil. 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. This is a moment of great significance for Tyme.”

David Vélez, founder and CEO of Nubank, says since the beginning of Nubank, they believed that the future of financial services globally is of digitally native companies. “We met dozens of teams across different geographies and we think that Tyme Group is extremely well-positioned to be a digital bank leader in Africa and Southeast Asia.

“We are excited to work with Tyme to share many of our learnings of scaling this model to hundreds of millions of customers.”

Praveg Patil, head of Asia Pacific, Impact & Private Equity at M&G, says investing in innovative companies like Tyme Group is essential for driving financial inclusion in underserved markets.

“M&G’s Catalyst is able to invest in transformative initiatives that create lasting social impact. Through this investment, we are addressing the needs of communities that have traditionally been excluded from the financial system to build a more inclusive financial ecosystem.”

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Funding will propel Tyme Group growth

Karl Westvig, CEO of TymeBank, Tyme Group’s flagship bank in South Africa, says the funding will propel TymeBank’s growth strategy, enabling it to realise its stated goal of being one of the top three retail banks in South Africa in the next three years.

“Additionally, the enhanced credibility and market visibility that comes with the affiliation with Nubank, along with the large established networks of global investors, including GIC, Berkshire Hathaway and others, helps to pave the group’s path towards a potential listing by 2028.”

Commenting on the Nubank partnership, Patrice Motsepe, chairperson of major shareholder African Rainbow Capital, says as the long-term strategic shareholder in Tyme, they enthusiastically welcome the partnership with Nubank. “We are convinced this will lead to an even higher and significantly accelerated growth trajectory for the multi-country Tyme Group.”

The oversubscribed Series D capital raise was led by Nubank, which invested US$150 million, with M&G’s Catalyst subscribing for US$50 million. Existing shareholders are investing a further US$50 million.

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African Rainbow Capital to remain largest Tyme Group shareholder

The transaction will see African Rainbow Capital remain the largest and Apis Growth Fund II as the second largest shareholder. Tyme’s other investors include the Founders, The Ethos AI Fund, Tencent, The Gokongwei Group, British International Investment (BII), Norrsken 22, Blue Earth and Lavender Hill Capital Partners. 

There are over 1 400 venture capital unicorns globally and only eight have been recorded in Africa. Westvig says this latest milestone underscores Tyme’s market potential and sets the stage for an exciting new era for the fast-growing group.

“We are proud to join the elite club of African Unicorns and this achievement serves to fuel our team’s ambition to be listing-ready in the next four to five years.” 

TymeBank is the first digital bank to reach profitability in Africa, with over 10 million customers since launching in February 2019. It was founded to make digital banking accessible and affordable to all South Africans across the economic spectrum.