TymeBank’s balancing act: Can the digital bank sustain rapid growth while taming losses?

To say that TymeBank is an interesting financial technology (FinTech) startup is an understatement. As recently as a month ago the company was celebrating crossing 8 million customers in South Africa and being crowned "one of the world's fastest growing digital banks." This is quite frankly a huge milestone that means TymeBank is fast becoming one of South Africa's most important public-facing financial institutions.

What gets less coverage in the press however is the cost of such rapid growth. At the midpoint of 2021 - TymeBank was alerting investors to the fact they are losing money at quite a rapid pace:

We draw attention to the fact that at 30 June 2021, the bank had accumulated losses of R4,793,322,479 (2020: R3,867,958,185). These losses substantially represent bank establishment and build costs. The ability of the bank to continue as a going concern is dependent on ongoing procurement of capital and funding for the operations of the bank.

The ability of the bank to continue as a going concern beyond the period 31 October 2022 is dependent on a number of factors, the most significant ones being the ongoing support from existing shareholders, the sourcing of capital from potential new shareholders, raising of working capital facilities as required, along with the execution plans for the scaling of existing services and delivery of new products and features into the market, and the impact of the COVID-19 pandemic on socio-economic conditions in the country.

Tyme Bank | Annual financial statements (2021)