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African Rainbow Capital and Ethos Private Equity announce investment deal

Jun 10 2019 15:54
Compiled by Carin Smith

Empowerment investment holding company African Rainbow Capital (ARC) and asset managers Ethos Private Equity have jointly announced an investment of R200m by the Ethos Artificial Intelligence (AI) Fund and co-investors - jointly the Ethos AI Fund - in recently launched digital bank TymeBank.

The bank is majority owned by ARC.

The transaction is subject to all conditions precedent being met. In a separate transaction, ARC will invest R100m into Ethos AI Fund.

Existing investors in the fund include high-net-worth individuals, family offices, as well as institutional investors. 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.

The investment by the Ethos AI Fund in TymeBank will result in the fund being an 8% shareholder in the bank. The transaction value was agreed with Ethos management before the bank was formally launched in February 2019.

Since TymeBank was launched, more than 400 000 clients have signed up for bank accounts. 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.

The current remaining shareholders in TymeBank include ARC, the founders and executive management of TymeBank, and a staff trust.

TymeBank has positioned itself as a low-cost transactional bank to the mass market segment. Consumers in this segment are traditionally under-served as well as under-serviced.

The bank has an innovative use of technology and a strategic relationship with Pick n Pay and Boxer stores.

Following the AI Fund investment, TymeBank will also benefit by having access to a pool of knowledge and experience in the use of artificial intelligence.

TymeBank and its controlling shareholder will embark on the next phase of capital raising to facilitate the growth of the bank.



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