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Five things that made Tyme Bank profitable in 2023

TymeBank, a neobank based in South Africa, attributes its 2023 profitability to five crucial elements, including a distinctive business model, strategic partnerships, lending products, and capital infusion.

Five things that made Tyme Bank profitable in 2023
TymeBank

In December 2023, TymeBank, a neobank based in South Africa, achieved its first month of profitability, rebounding within six months after incurring a loss of approximately $45 million in June of the same year.

"TymeBank’s landmark achievement comes after more than four years of dedicated effort, strategic investments, and an unwavering commitment to the business’s core mission to offer quality banking services to all South Africans," Patrice Motsepe, founder and chairman of major shareholder African Rainbow Capital, said.

TymeBank says it has gained 8.5 million users since it started operations.

According to a statement seen by Bendada.com, the neobank based in South Africa identifies five key factors that contributed to its profitability. They include:

  • A unique model

Tyme Bank stated that its success lies in its "unique model," which involves the integration of digital channels with in-store kiosks at major retailers, allowing for a consistent acquisition of around 150,000 customers each month.

  • Strategic partnerships

In March 2019, TymeBank launched its services in 500 stores affiliated with the supermarket chains Pick n Pay and Boxer. This strategic pre-launch initiative enabled the neobank to amass over 500,000 users during that period.

Subsequently, in 2020, TymeBank expanded its outreach by partnering with the Zion Christian Church. Through this collaboration, TymeBank introduced the Zion City Moria membership card, serving as both a church membership card and the member's bank card. The card offers various benefits, including additional Smart Shopper rewards on Pick n Pay purchases, zero-rated data for SmartApp and internet banking, and security access control.

The Zion Christian Church boasts a congregation of over 12 million members, with 75% of them residing in South Africa.

Additionally, TymeBank established a strategic partnership with The Foschini Group (TFG) in 2021, enabling the introduction of its financial products and services both in-store and on digital platforms for the advantage of TFG's expansive customer base, which exceeds 26 million customers in South Africa.

These three partnerships, according to the bank, have partly facilitated its achievement of profitability.

  • Lending

The neobank based in South Africa indicates that its lending portfolio, centred around Merchant Cash Advance, experienced a growth of over 30% year-on-year, providing financing to over 50,000 SMEs in the country.

Recall that in August 2022, TymeBank acquired Retail Capital, a Cape Town-based lending fintech that provides funding for SMEs in the country.

  • Tyme Group's capital injection

Last year, Tyme, the Singaporean global digital bank and parent company of South Africa's TymeBank, successfully raised $77.8 million in its pre-Series C capital raise, with investments from Norrsken22 and Blue Earth Capital.

These funds were allocated for operations in South Africa (specifically at TymeBank) and the Philippines, as well as for prospective expansion throughout Southeast Asia. The South African neobank highlighted that this capital infusion played a crucial role in facilitating its growth.

  • Pioneering innovations

Since its launch, TymeBank has introduced a series of pioneering initiatives, such as offering the most cost-effective banking services in South Africa, enabling the swift opening of a bank account in under five minutes, providing South Africa's leading fixed deposit savings rate of 11%, introducing the interest-free Grant Advance for social grant recipients, collaborating with the National Healthcare Group to launch healthcare insurance (TymeHealth)—a first in South African banking, and unveiling the buy-now-pay-later product, MoreTyme, at a time when the concept was relatively unfamiliar in South Africa.

"We are extremely proud of our achievement, particularly when you consider that globally, less than half of the top 100 digital banks are profitable. In fact, a recent study stated that less than 5% of all neobanks worldwide had reached profitability. And of those that are in the black, most have taken a lot longer to become profitable; notable examples being Latin America’s Nubank and London-based Monzo, which took eight and seven years respectively," CEO of TymeBank, Coenraad Jonker said.

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