OakNorth receives $440mn investment from SoftBank

Tuesday 12th February 2019 13:24 EST

The chief executive of Oaknorth believes that a record-breaking $2.8 billion valuation placed on the British business lender is “modest”. The UK based financial start-up last week raised $440 million after accquiring investment from SoftBank’s Vision Fund as well as the Clermont Group.

Rishi Khosla, who co-founded and runs the financial technology business, in his statement to The Times said that the valuation after a near-$400 million investment by the Softbank Vision Fund could be “low”, given the fintech’s record in its first two years and its prospects.

Since its launch in September 2015, OakNorth said it has lent more than $3.7 billion to British businesses and its loans have also helped create over 9,500 new homes and 11,000 new jobs in the UK. Employing only 300 people, it increased its loan book by almost 160 per cent last year to £2.2 billion, while loans from licensing technology to other financial institutions jumped from $100 million to $4 billion.

Khosla picked up the tricks of the trade while working for Lakshmi Mittal. One of these included his decision of deliberately staying away from diluting his stock in his start-up. That strategy seems to have worked for Khosla’s company, which has been billed as the fastest unicorn in Europe, with a billion-dollar valuation.

Among the businesses that have benefited from OakNorth are Leon, the Tamarind Collection, SGS Hotels Group, an Indian hotels and property group which wanted to extend its footprint in the UK with the addition of the Best Western Calcot in Reading and Beaumont Capital, an investment firm which backs digital and online companies at a very early stage.

The financing will now be used to launch its US lending operations and the fintech company has said it was “now in a position to bring this same positive multiplier effect and capabilities to North American lenders and businesses” and that it would be able to “deploy the OakNorth Analytical Intelligence platform to more banks and lenders around the world”.

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