African Rainbow Capital (ARC) and Ethos Private Equity announced an investment of R200 million by the Ethos AI Fund in TymeBank.
ARC also plans to invest R100 million to the Ethos AI Fund in a separate transaction, with the aim of providing ARC with access to an ecosystem which supports the commercialisation of new technologies.
Following the investment in TymeBank, the Ethos AI Fund will become an 8% shareholder in the bank.
Ethos agreed on the value of the transaction before the formal launch of the bank in February 2019, and ARC expects the value of the bank to increase substantially after signing up more than 400,000 clients since its launch.
The company added that TymeBank is expected to achieve 500,000 clients by July this year.
Commenting on the transaction, Ethos AI Fund partner Roger Grobler said the investment represents more than just capital.
“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,” Grobler said.
“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.”
“We are delighted to have the Ethos AI Fund as a co-investor alongside our majority shareholder ARC,” said TymeBank co-founder Coen Jonker.
“This investment from the Ethos AI Fund will strengthen our focus on technology and it will likely cement our current leadership position as the lowest cost banking service provider to consumers.”