OakNorth lands $440m round led by SoftBank ahead of US drive

By Roger Baird on Friday 8 February 2019

Digital Banking

The British challenger bank says the total investment in the four-year-old firm now tops $1bn.

British challenger business bank OakNorth has landed $440m of investment led by Japanese conglomerate SoftBank as it gears up to drive into the US market.

The London-based fintech firm said it will use the cash “to launch its lending operations in the US”, promising its entry into the enormous American market would “accelerate business lending, while creating efficiencies and improving credit quality”.

OakNorth, led by co-founder and chief executive Rishi Khosla (pictured), said it has lent over $3.7bn to British businesses without a single default or late payment since its launch in September 2015.

The digital bank makes cash from lending to small businesses and licensing its OakNorth Analytical Intelligence, a credit underwriting and portfolio monitoring technology, to rivals.

The business said this round of cash takes its total funding from investors to over $1bn, which is “more than any other fintech in Europe and ranking it as one of the most well-funded fintechs in the world”.   

Singapore conglomerate the Clermont Group, an existing investor, also took part in this fundraising round. Other notable existing backers of the business include UK investment firm Toscafund and Singapore’s sovereign wealth fund GIC.

OakNorth’s Khosla said: “With this finance from SoftBank and follow-on investment from Clermont, we will be able to continue scaling the group’s operations globally. If you’re a lender who wants to get serious about commercial lending to small and medium size growth businesses, we can help you originate and underwrite deals faster and more efficiently, as well as maintain a clearer view of how each business in your portfolio is performing.”

He added: “If you’re a growth business in either the UK or the US, we can help you by providing you with a customised debt finance solution that will enable you to achieve your growth ambitions.”

This latest investment values the firm at around $2.8bn, making it almost a triple ‘unicorn’ business. A ‘unicorn’ is referred to by investors as a privately-held blockbuster startup valued at over $1bn.  

SoftBank Investment Advisers partner Munish Varma said the digital bank “has a clear and ambitious vision to scale globally”.  

He added:“OakNorth is delivering a highly differentiated service to a key segment of the market that has historically been underserved by commercial banks.”

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