TymeBank is considering listing on various stock exchanges, including the JSE, within the next five years as its valuation is nearing R20 billion.
This was revealed by TymeBank CEO Coen Jonker in an interview with Business Day Spotlight.
TymeBank is a digital bank backed by South African billionaire Patrice Motsepe’s African Rainbow Capital, providing affordable banking solutions through a network of kiosks and retail partners.
The bank has garnered support from renowned investors, including Chinese tech giant Tencent, British International Investment, and the Ethos AI Fund.
It launched in February 2019 with a value proposition based on three pillars – simplicity, transparency, and affordability.
It closely follows Capitec’s strategy of simplicity and transparency, which helped it to become South Africa’s largest bank by clients.
The strategy also worked well for TymeBank, which signed up three million South African customers within the first two years.
TymeBank announced in October this year that it has onboarded eight million customers, which means one in every five eligible South Africans now has a TymeBank account.
Jonker noted that TymeBank’s customer acquisition rate has continued to accelerate, with more than 200,000 customers signing up monthly and a 70% account activity rate on a rolling 30-day basis.
This has led to the bank nearing a value of R20 billion at a recent funding round, where its parent company, African Rainbow Capital, invested R664 million in TymeBank and Tyme Global.
“We would like to list the business, but the time is not right. I think four to five years from now, watch this space,” Jonker said.
“The big question for us is where would be a good place to list it. Is the JSE the best market to list, or should one consider maybe something like the Nasdaq or New York Stock Exchange or London Stock Exchange?”
Jonker’s declaration of TymeBank’s intention to list comes after African Rainbow Capital indicated that it might delist from the JSE.
This was revealed in ARC’s annual report, released in October. The company said it will consider whether there is value in remaining listed on the JSE.
ARC’s latest NAV is R11.41, while the company’s share price is R4.93 as of Wednesday morning. This equates to a trading discount of over 50%.
The company said the discount and the low free float – the number of shares available to trade publicly – will receive more focus in 2024.
ARC said it continues to implement appropriate actions to minimise the discount to underlying net asset value to the extent possible.
“We will continue efforts to address the issue,” co-CEOs Johan van der Merwe and Johan van Zyl said in the report. “In the current environment, it remains prudent for management and the board to continue to consider whether there is value in being listed, should the discount remain excessive.”
Their view was echoed by company chair Mark Olivier, who said the discount is affecting the ability of the investment holding company’s ARC Fund to raise capital.
“The present focus is on organic growth and smaller add-on acquisitions. Therefore, further funding is not currently needed,” he said.
“However, the discount reduces our ability to raise capital as a listed entity should a compelling but sizeable investment opportunity arise.”
“It is a constraint that removes much of the benefit of being a listed entity. The board’s challenge will be to deal with the listing, particularly securing access to capital for growth over the medium term.”