OakNorth secures investment for lending expansion

By Paul Norman - Friday, October 13, 2017 11:23

OakNorth, the challenger bank that has lent to Frogmore, Galliard Homes, Brasserie Blanc and LEON, has secured a £154m investment as it looks to lend a further £1.5bn to UK businesses in 2018.

OakNorth has secured a £154m investment from The Clermont Group, Toscafund and Coltrane.

It said the capital will enable it to continue supporting UK businesses and enable lenders in other geographies to unlock the bespoke SME lending space through ACORN machine.

ACORN will now be available to lenders across the world.

Launched in September 2015, OakNorth is a UK bank providing debt finance (£500k to £20m) to UK businesses, helping to create thousands of new jobs and homes in the country. In 25 months, it has grown its loan book to over £800m with clients including: LEON, Galliard Homes, Frogmore, Brasserie Blanc, Strawberry Star, and The Collective.

It reported that its loans have directly helped with the creation of over 3,000 homes and 2,000 jobs in the UK, as well as adding £3bn to the UK economy. 

Its ACORN data and technology platform enables lenders to "originate, underwrite, monitor, and book transactions faster, more efficiently and with more rigour".

It said: "Its 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 more informed credit decisions. ACORN’s team of credit analysts and data scientists manage the process, training the machine learning algorithms, so that the platform continues to evolve."

The funding will enable OakNorth to significantly boost its contribution to the UK economy, and launch ACORN to lenders around the world. The three investors – The Clermont Group, Toscafund and Coltrane – have purchased a circa 16% stake. 

Rishi Khosla, CEO and co-founder of OakNorth, said: “It has been an incredible and extremely humbling two years for OakNorth – we’ve had the chance to work with some of the UK’s most inspiring and ambitious entrepreneurs, and have helped over 150 businesses achieve their growth ambitions. While we have reached an £800m loan book in two years, we know that this represents just a fraction of the businesses that need financing support. This funding will enable us to boost our lending by an additional £1.5bn and add thousands more jobs and homes in the UK.

“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.”

pnorman@costar.co.uk

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