Challenger bank OakNorth has now passed the $1 billion funding mark – a record for a European FinTech – following its latest funding round.
The fast-growing FinTech star has secured a $440 million investment from the SoftBank Vision Fund and the Clermont Group.
London-based OakNorth is a bank run by entrepreneurs for entrepreneurs. Its target market for loans is the 15 per cent of businesses which are fast-growing and profitable rather than all SMEs.
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It will use the investment to expand its SME loan origination and credit capabilities to North American banks and lending institutions while continuing to drive the growth of the OakNorth Analytical Intelligence (ON AI) platform, already being used by banks across the US, Europe and Asia with combined assets of over $800bn.
“With this finance from SoftBank and follow-on investment from Clermont, we will be able to continue scaling the group’s operations globally,” said Rishi Khosla, co-founder of OakNorth Holdings.
“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.
“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.
“We have a relentless focus on helping small and medium sizes businesses across the world that are in growth mode access better financing to fund their development.
“These businesses are the backbone of economies and communities, as evidenced by the thousands of new homes and jobs created from the loans we’ve done so far.”
OakNorth is now one of the most well-funded FinTechs in the world and has profitably lent over $3.7bn to British businesses without a single default or late payment since its launch in September 2015.
Its loans have also directly helped with the creation of over 9,500 new homes and 11,000 new jobs in the UK.
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His company says SoftBank Investment Advisers’ support will help open doors to market-leading institutions.
Its technology is currently being used by institutions in Asia, North America and Europe – including NIBC Bank in the Netherlands which participated in the $100m fundraising the group closed in September 2018.
Richard F. Chandler, chairman of Clermont Group, said: “The Clermont Group is delighted to continue its support of OakNorth which is proving to be an emerging champion in the financial services sector.
“It is building a strong and resilient business with an innovative business model.”
Munish Varma, partner at SoftBank Investment Advisers, said: “OakNorth is delivering a highly differentiated service to a key segment of the market that has historically been underserved by commercial banks.
“The company has a clear and ambitious vision to scale globally and we are excited to work with them to achieve this goal.”