TymeBank, South Africa’s fastest-growing digital bank, has acquired Retail Capital, a fintech startup that offers finance to small and medium-sized businesses. TymeBank intends to leverage the acquisition to strengthen its business banking offering.
Since its 2011 start, Retail Capital has created an effective risk decisions process for small company finance products, introduced a set of fintech solutions with great success, and created the underlying technology for embedded funding solutions.
The business, which is presently cash-generative and successful, has so far invested over ZAR5.5 billion (US $330 million) in more than 43,000 business owners. It has since been bought by TymeBank, a digital bank that opened in February 2019 and has amassed more than five million clients.
Retail Capital will join TymeBank as a division and serve as the hub of the bank’s expanding business banking services after the purchase, which is pending regulatory approval. The rise of the previously underrepresented small company sector, according to TymeBank, depends on being able to properly route funds to business owners in South Africa.
“This acquisition will enable TymeBank to expand its offering to entrepreneurs to include working capital finance. Retail Capital has acquired significant risk management experience over the past decade and through different economic cycles. They have an experienced team in place and their risk models and operational processes have been battle-tested and optimised to a significant degree for small-business funding,” said TymeBank CEO Coen Jonker.
“Together, we look forward to providing access to innovative solutions to ensure business owners can fuel their growth, drive job creation and contribute to the broader economy.”
Karl Westvig, CEO of Retail Capital, noted that his organization has a long history of helping SMEs by providing them with access to inexpensive capital that promotes the expansion of their enterprises.
“Now, through this acquisition by TymeBank, we will be able to scale the offering, giving SMEs the opportunity to expand through funding that works on their terms,” he said.
“Retail Capital already powers many industry-leading partners in the Acquiring, Retail and Payments space to support their SME customers and the tie-up with TymeBank will further enhance this offering to our partners’ customers. Both Retail Capital and TymeBank have the customer front of mind, and we see the strategic move as a positive one that will greatly assist all business owners in South Africa.”
Retail Capital’s international growth into new areas will be made possible by Tyme Group thanks to its multi-nation digital banking footprint.
