South African neobank TymeBank has incredibly swung its fortunes around, reporting a profitable December 2023 six months after posting a R858 million (~$45 million) loss.
Six months after posting a staggering R858 million (~$45 million) loss on June 30, 2023, South African digital bank TymeBank recorded its first month of profit in December 2023. The company did not state how much the profit was.
Launched in February 2019, the Neobank claims to be the first digital bank on the continent to become profitable, driven by the 8.5 million customers it has thus far. According to financials for the year ended 30 June 2023 seen by TechCabal, TymeBank’s cumulative losses by the aforementioned period stood at R6.8 billion (~$359 million) with R1.6 billion (~$85 million) in cash.
“These losses substantially represent the Bank establishment and build costs,” TymeBank said then. “The ability to continue as a going concern is dependent on ongoing procurement of capital and funding of operations for the Bank.” The company had further stated that its financial position cast doubt on its ability to settle its debts and continue operating beyond October 2024. That doubt seems to have been cleared, taking into consideration today’s announcement.
A remarkable swing
According to TymeBank, the digital bank’s swing to profitability was driven by by strategic partnerships with the likes of Pick n Pay and Boxer, The Foschini Group (TFG) and the Zion Christian Church (ZCC), the ~30% growth of its lending portfolio year-on-year, as well as combining digital channels and in-store channels for customer acquisition. The company also credited the achievement to its venture capital backers.
“We are extremely proud of our achievement, particularly when you consider that globally, less than half of the top 100 digital banks are profitable,” said Coenraad Jonker, CEO of TymeBank.
In May 2023, the entity announced a $77.8 million pre-Series C round led by Norrsken22 and Swiss global impact investment firm, Blue Earth Capital and has raised $260 million in total. TymeBank also acquired fintech startup Retail Capital in August 2022. Currently valued at $965 million according to Jonker, TymeBank plans to raise as much as $100 million this year at a $1 billion-plus valuation. The funding will drive further expansion into Southeast Asia with an entry into Vietnam.
