Tencent takes on TymeBank – CEO Tauriq Keraan

CEO of TymeBank Tauriq Keraan unpacks the growth opportunities that will be created as a result of the Chinese conglomerate’s investment into the challenger bank. TymeBank, controlled by Patrice Motsephe’s investment arm African Rainbow Capital, intends on using the latest funding of $180m (R2.9bn) to invest in growth opportunities in South Africa and internationally. Tencent, along with the CDC Group, has injected more than R1bn into TymeBank to become new shareholders. Keeran is excited to harness the expertise of Tencent, as one of the leading financial technology-driven companies in the world. TymeBank recently launched several exciting partnerships with some of South Africa’s most recognised brands, which Keeran expects to bear fruit in the upcoming financial year. – Justin Rowe-Roberts

Tauriq Keraan on Tencent and CDC’s investment into TymeBank 

It’s a momentous occasion, not only for TymeBank, but for the conviction that people have in our business model, our performance, our strategy and for the banking sector. It’s an affirmation that the banking sector is safe and secure. It is growing and there are areas that are innovating. This is exciting for us. It’s the conclusion of an extended Series B raise, which has ultimately concluded on a total amount of $180m. The reality is that investors of this magnitude, pedigree and track record have massive networks and expertise. I’ve come to learn you just simply cannot study everything in the world. So, the best way to learn is to study companies and then to start drawing parallels. What better place to study and to gain those insights than from investors of this scale.

The CDC Group has a stated strategy to invest in infrastructure, including digital infrastructure that will allow it to reach underserved communities. And because what we’ve built at TymeBank is a completely scalable digital bank that services all segments, all demographics and can service low-income segments very profitably. From my experience of the process, that has certainly been an appeal. It is knowledge we will harness. On the Tencent side of things, well, I think we’re all familiar with that business. They are one of the world’s leading fintech investors and one of the biggest companies in the world. They have all these experiences, not only in digital businesses, but more recently in digital banks as well. That expertise, that ability to connect us with networks is invaluable. Over and above the capital.

On the importance of scale to TymeBank

Scale is critically important. Any digital business, whether you are a mobile network operator, an e-commerce business or a digital bank, for that matter, you really set off for scale from day one. In other words, you have the cost base that through modern data and technology you will be able to keep under control, which we certainly do. But now you need to hurdle that. And the only way you can do that is to scale. So, you’ve got to get that balance right. I’d say it is crucial to our success. 

On gaining market in a tough macroeconomic environment

The economic circumstances break my heart. It’s really tough out there for consumers, for small businesses, as we all know. You’re all right, a bank’s performance is closely correlated with the macroeconomic environment. However, as a challenger bank, things are very different because your growth trajectory is very different. You can hone your business in a way into segments that are less affected. Now that is what we do. But we’ve also built a business and an operating model that are fully translatable across segments and in a profitable way.

If we continue to make smart decisions – such as the decision we made with the buy-now, pay-later programme, for example – build a track record and become recognised as a lender of credibility, use that data to get into longer forms of lending … I think, if we are continuously smart about how we distribute, how we use and augment other forms of data, we will continue to see this rapid growth that we’ve experienced and [it will be] sustainable growth.

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