African Rainbow Capital (ARC) and Ethos Private Equity have jointly announced an investment of R200 million by the Ethos Artificial Intelligence (AI) Fund and co-investors (jointly Ethos AI Fund) into TymeBank.
In a separate transaction, ARC will invest R100 million into Ethos AI Fund.
“The strategic rationale for ARC investing in the Ethos AI Fund is to provide ARC with access to an ecosystem where new technologies in support of the Fourth Industrial Revolution are optimally commercialised,”ARC said in an emailed statement.
“The investment by the Ethos AI Fund in TymeBank will result in the Fund being an 8% shareholder in the bank,” ARC said.
The current remaining shareholders in TymeBank include ARC, the founders and executive management of TymeBank, and a staff trust.
ARC said that TymeBank will now embark on the next phase of capital raising to facilitate the growth of the bank.
“For the Ethos AI Fund, this investment represents much more than capital,” said Roger Grobler, Ethos AI Fund partner.
“In TymeBank, we see a highly innovative, highly ethical approach to digital banking, which puts South Africans back in control of their money, while promoting inclusive economic growth for the country.
“Together with ARC and TymeBank management, we believe that by leveraging AI’s algorithmic capabilities, we can enable TymeBank to rapidly scale its business with more appropriate products, at a lower cost and with superior service levels.”
Since TymeBank was launched, more than 400,000 clients have signed up for bank accounts, which should lead to a considerable increase in the enterprise value of the bank.
Customer acquisition achievements are significantly ahead of targeted projections and the bank is well on its way to achieve 500,000 clients by July this year.