Challenger bank goes from strength to strength
Launched in September 2015, OakNorth is a UK bank providing fast, flexible and accessible 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. Its loans have directly helped with the creation of over 3,000 new homes and 2,000 new jobs in the UK, as well as adding £3bn to the UK economy. While other banks have retrenched from the SME lending market due to ongoing economic uncertainty, OakNorth has seen it as an opportunity to help entrepreneurs scale at a time when the country needs it.
OakNorth has been able to unlock the bespoke lending market for SMEs through the ACORN data and technology platform, which will now be available to lenders in other geographies. ACORN enables lenders to originate, underwrite, monitor, and book transactions faster, more efficiently and with more rigour. 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 c.16 percent stake. Founded in 1986 by New Zealand-born entrepreneur, Richard F Chandler, The Clermont Group is an international business group headquartered in Singapore, that builds and invests in businesses in healthcare, financial services and energy. Toscafund Asset Management is a leading multi asset managerfounded in 2000 by Martin Hughes. Funds managed include global equity financials, commercial property, UK debt and activist strategies. Coltrane Asset Management, founded by Mandeep S Manku in 2012 is an investment partnership focused on Europe. The financial advisers on the funding round were Morgan Stanley and Citi. Proskauer was the legal adviser.