Challenger bank OakNorth has secured a ?154m investment to help it lend ?1.5bn to UK businesses next year.
Investors to the round included The Clermont Group, Toscafund and Coltrane, with the group acquiring a 16 per cent stake in the company.
Launched in 2015, OakNorth is a cloud-based bank which offers flexible access to debt financing from ?500,000 to ?20m for UK SMEs. The bank’s ACORN platform helps collect data about SMEs from around the world on a host of parameters, which is then analysed by machine learning algorithms to decide on credit decisions.
Over the past 25 months the company has increased its loan book size to more than ?800m and has clients including LEON, Galliard Homes, Frogmore, Brasserie Blanc, Strawberry Star, and The Collective. Through the banks loans it has helped to create 3,000 new homes, 2,000 new jobs and add ?3bn to the UK economy, according to the company.
This new line of capital will help the company to increase its contribution to UK financing, and launch its ACORN platform to lenders around the world. The funding will also allow the company as it looks to invest ?1.5bn and add thousands of more jobs in the UK.
OakNorth CEO and co-founder Rishi Khosla said, ?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.p>
This new wave of equity follows the company ?66m Series A round, which it closed in 2015.
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