The TymeBank monster

African Rainbow Capital’s (ARC) investment in TymeBank is paying off as the company continues to go from strength to strength.

ARC’s results for the year through June 2024, released on Monday, revealed TymeBank’s strong performance.

ARC is an investment holding company with a diversified portfolio of investments selected to deliver long-term capital growth to investors.

In its 2024 results, the company reported that its intrinsic net asset value grew by 21.5% to R18.62 billion.

The ARC Fund’s investment portfolio comprises 32.6% mature assets, 54.7% high-growth assets, and 12.7% early-stage assets. 

Its mature investments include 31 entities, while high-growth assets and early-stage investments comprise nine entities each. 

The high-growth investments include portfolio companies like the Tyme Group, Rain, Linebooker and Capital Legacy.

The Tyme Group, which comprises two businesses—one South African and one Asian—was a standout performer in this year’s results.

The Tyme Group’s Asian division – Tyme Asia Holdings – comprises Tyme Global and GOtyme.

Tyme Global is a holding company based in Singapore. It is the platform through which multi-country banks are being launched. 

GOtyme is a digital bank based in the Philippines that was launched in November 2022 and is already showing impressive growth.

The company has grown its customer base to 3.6 million within 18 months of launching GOtyme in the Philippines.

ARC said the model’s growth trajectory is strong, with activity rates exceeding those of South Africa and deposits growing faster than anticipated. 

GOtyme is currently ranked sixth 6 in the country regarding EFT transfer and QR payment volumes. The bank is expected to reach profitability in Q4 of 2025.

The Tyme Group’s South African segment—Tyme SA Holdings—comprises TymeBank, a leading digital bank in the country.

It boasts the largest cash-in and cash-out network in South Africa, thanks to its extensive retail partnership network with Pick n Pay, Boxer, and The Foschini Group (TFG). 

TymeBank is the crown in the Tyme Group’s crown. The bank, which started almost five years ago, is valued at an estimated $965 million and has racked up 9.5 million customers in that time. 

The bank’s deposits have grown by 59% to R6.5 billion, and merchant credit advances have steadily risen to around R1.8 billion as of 30 June 2024. 

Tymebank’s full range of banking products offers excellent value to customers, giving the bank many levers for growth. 

The operational leverage provided by the bank’s technology is clear – net operating income tripled year-on-year while costs increased by 10%. 

TymeBank CEO Coen Jonker said earlier this year that if it meets its $100 million funding target, the company could reach a $1 billion valuation.

The bank is currently preparing for an initial public offering. Its goal is to list TymeBank in New York by 2028, alongside a secondary listing on the JSE.

The company achieved break-even in December 2023, making it the first digital bank in Africa to do so.

In its 2024 financial year, the ARC Fund’s net fair value gains amounted to R2.67 billion. 

The main driver in these gains was an increase of R1.67 billion from its Financial Services portfolio, which was driven by gains in Tyme Group, Alexforbes and Capital Legacy

The largest contributor to this was Tyme Bank, which generated fair value gains of R1.18 billion in 2024. ARC’s latest results said sustained profitability is expected in the coming months.

Based on the company’s impressive growth, ARC pumped money into the company in 2024, with ARC Financial Services Holdings investing a total of R174 million in Tyme Group.

ARC made an additional R169 million into the Tyme Group in its 2024 financial year.

The company said the acquisition of shares in Tyme SA Holding and Tyme Group Africa was made to retain control of the bank and not dilute the group to below 50%.