Ethos Artificial Intelligence (AI) has announced a R200 million investment in recently launched digital bank TymeBank, which is owned by African Rainbow Capital (ARC).
The investment by the Ethos AI Fund in TymeBank will result in the fund being an 8% shareholder in the bank.
With the transaction, TymeBank will benefit by having access to a pool of knowledge and experience in the use of artificial intelligence, which is an add-on for a bank.
TymeBank claims it is unrivalled in its low-cost operating platform as a result of its innovative use of technology and its strategic relationship with Pick n Pay and Boxer stores, geared towards offering customers a compelling banking value proposition.
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, which should lead to a considerable increase in the enterprise value of the bank.
The transaction is subject to all conditions precedent being met.
Roger Grobler, the Ethos AI Fund partner, says: “The Ethos AI Fund invests in businesses that will benefit disproportionately from artificial intelligence, primarily in the form of algorithmic decision-making. These algorithms typically help organisations make high-frequency decisions that are often not suited to human capabilities due to the computational complexity and breadth of the data used.”
ARC says the move will help the digital bank to “on-board new clients over a sustained period of time and therefore meet the objectives” of the business case.
Commenting on the deal, Johan van Zyl, co-CEO of ARC, says: “As TymeBank’s controlling shareholder, we are pleased with how TymeBank management is executing the agreed strategy.
“The operational results, such as client acquisition rates, achieved thus far have exceeded our expectations. As the majority shareholder in TymeBank, we are required to think ahead and introduce like-minded strategic partners to enable us to achieve success over the longer term.”