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UK challenger bank OakNorth raises an additional $100m


UK challenger bank OakNorth has raised an additional $100m (£78m) for a 4.3% stake in the company.

The money will be used to drive the bank’s growth globally and to continue building the business in the UK.

New shareholders EDBI and NIBC Bank joined the round alongside existing backers Clermont Group, GIC and Coltrane Asset Management.

Now valued at $2.325bn – up from $1.4bn following its £154m equity raise announced in October last year – OakNorth has doubled its loan book from from $1.1bn to $2.2bn and expects to lend a further $600m this year.

Richard F. Chandler, chairman of Clermont Group, commented on his decision to back the company.  

“The Clermont Group is delighted to continue its support of ACORN OakNorth. We believe it has the potential to become a globally scalable business and a future champion in the financial services sector. By providing capital to the underserved SME segment, ACORN OakNorth reflects the Clermont Group’s philosophy of building and investing in companies that contribute significantly to their nation’s economy.

“For SMEs, capital can be a scarce and vital resource. ACORN OakNorth’s ability to provide capital to SMEs plays an important role in helping to resource entrepreneurs and businesses that have traditionally been underserved by the large financial institutions.”

Since its inception, Acorn OakNorth Holdings has secured $576m from several investors, including: NIBC, EDBI of Singapore, GIC, Toscafund, Coltrane, Clermont Group and Indiabulls.

The company was co-founded by Rishi Khosla and Joel Perlman, entrepreneurs who were inspired to launch ACORN OakNorth following the challenges they faced in securing debt finance from high street banks for their previous business, Copal Amba (acquired by Moody’s Corporation in 2014).

Chu Swee Yeok, Chief Executive Officer and President of the EDBI of Singapore, concluded: “We are excited to partner and help grow ACORN machine in Asia through its regional base in Singapore. By leveraging machine learning, proprietary and third-party data sources, as well as credit analysis competencies, we believe the platform can help address the underserved SME loans segment in the region, improving financial institutions’ cost efficiency and underwriting processes.”