TymeBank, a South African fintech, has announced that it reached its first-ever profit in December 2023.
The neobank says it’s the first digital bank to break even and become profitable in South Africa and on the continent.
This news comes six months after the digital banking service, which operates online with no physical branches, posted a loss of R858 million (~$45 million).
Founded in 2019, TymeBank claims to have added 150,000 customers monthly since it targets the underprivileged and economically marginalised groups in society with its easily accessible, affordable, and quality banking services.
The Founder and Chairman of African Rainbow Capital (ARC), Patrice Motsepe, lauded the fintech for its historic profitability, citing more than four years of committed work, strategic investments, and “an unwavering commitment to the business’s core mission to offer quality banking services to all South Africans.”
Motsepe’s ARC owns the majority of shares in TymeBank, with a controlling stake of 57.7%. Other investors in the fintech are African Fig Tree (AFT), JG Summit Holdings (JG Summit), Chinese International Investment (BII), Apis Growth Fund II, and the Ethos AI Fund.
According to ARC’s previous financial reports, TymeBank’s annual revenue run rate exceeded R1.8 billion, or roughly $95 million. Before hitting profitability, the company had recorded cumulative losses of R6.6 billion (~$347 million).
When you consider that only approximately 5% (13 out of 249) of digital banks worldwide are profitable, this is not too concerning.
South Africa’s only black-controlled bank, which operates in two markets — South Africa and the Philippines — has stated that the milestone is a watershed moment for the company, propelling it to the ranks of the world’s fastest-growing digital banks.
TymeBank ascribes its achievement to its unique hybrid approach of combining digital channels with its walk-in kiosks, made possible by long-standing, strategic partnerships with retailers, such as Pick n Pay, Boxer, and TFG, and loyal customers. The company also attributes its success to the unshakeable confidence of its shareholders.
In May 2023, Norrsken22 and Blue Earth Capital led a pre-Series C round that raised $77.8 million for the digital banking platform. TymeBank’s competitors, Bank Zero and Discovery Bank, have yet to turn a profit.
Further, the CEO of TymeBank, Coenraad Jonker, commented on the milestone, pointing out that this development is an impressive accomplishment considering that fewer than half of the top 100 digital banks globally are profitable.
He added that the digital bank’s newfound profitability is a South African success story that its 8.5 million customers should be proud of.