GIC et al. in $100m round for Acorn OakNorth

Greg Gille
07 September 2018

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Acorn OakNorth, a UK-based digital lender for SMEs, has raised a fresh $100m round of funding from a consortium of backers including Asian sovereign funds GIC and EBDI.

Singapore's EBDI fund and NIBC Bank came on board as new backers in the round, which also saw participation from existing investors Clermont Group, GIC (an investor in Unquote parent company Acuris) and Coltrane Asset Management.

The $100m investment represented 4.3% of the business, according to an OakNorth statement – this would equate to a valuation of around $2.3bn just three years after inception, or around 170x the £10.6m pre-tax income posted in 2017.

The company stated it would use the fresh funding to accelerate the growth of its Acorn Machine platform and enable OakNorth to continue scaling its lending efforts in the UK. It also said it had already doubled its loan book from $1.1bn to $2.2bn so far this year, with a further $600m expected to be lent by the end of 2018.

OakNorth expects to add another 50 people to its 100-strong team across growth and operations, engineering, machine learning and data science.

According to a report by the Financial Times, OakNorth could consider listing in the future.

Previous funding
OakNorth secured a £66m equity investment from Indian non-bank SME lender Indiabulls in late 2015. It then attracted £160m from Coltrane, Clermont Group and Toscafund, valuing the company at more than $1bn, in October 2017. A month later, it received a £90m investment from GIC.

Overall, OakNorth has received $576m in funding since inception.

Company
Established in 2015, Acorn OakNorth is a challenger bank that provides debt finance from £500,000 to £40m to fast-growth businesses, as well as property developers and investors. Its UK clients include Leon, Brasserie Blanc and Z Hotels, and property developers Regal London, Galliard and Frogmore.

Meanwhile, its Acorn Machine automated lending software is licensed to a number of lenders outside the UK, with $5bn in assets under service expected by year-end.

The business is fully regulated and claims it achieved profitability within a year of launching.

Advisers
Company – Proskauer Rose (legal).