OakNorth joins unicorn club with £154m funding round
12 October 2017 | 6219 views | 0
OakNorth, a UK challenger bank targeting small- and medium-sized businesses, is looking to ramp up lending and license its technology around the world after raising £154 million from a group of international investors.
Singapore-based The Clermont Group, Toscafund Asset Management, and Coltrane Asset Management participated in the round, buying a 16% stake, pushing OakNorth into the unicorn club.
One of a host of new entrants to the UK banking market, OakNorth bills itself as a bank for entrepreneurs, providing loans of between £500,000 and £20 million to small firms, although it also has regulatory approval to accept deposits and offer saving products.
Launched in September 2015, the bank has a loan book of over £800 million and claims to have helped with the creation of over 3000 new homes and 2000 new jobs, adding £3 billion to the UK economy.
The firm has set a target of lending a further £1.5 billion to UK businesses next year and is also planning to go global by licensing its Acorn data and technology platform to other lenders.
Acorn's cloud-based technology sources millions of data items on SMEs across various parameters, sectors, and markets, and then uses machine learning algorithms to pull out the pieces of data that lenders need to make informed credit decisions.
According to Sky News, advanced talks are underway with several North American banks about licensing Acorn.
Rishi Khosla, CEO, OakNorth, says: "Rather than building a technology platform and then going to market trying to sell it, we wanted to build the platform and prove the concept in a highly regulated and highly competitive market - the UK - via OakNorth. Through Acorn we will be able to help lenders around the world unlock the underserved and underestimated market for bespoke loans to SMEs."