ACORN OakNorth Holdings closes $100m round as business continues to grow ahead of plan
- This funding will be used to:
– Drive the growth of ACORN machine globally – the fintech platform which by the end of the year will have over $4bn in assets under service across clients in the US, Europe and Asia with offices in NYC, London and Singapore;
– Continue building its UK business, OakNorth, which by the end of the year will have a loan book of c.$2.8bn; having already lent over $1bn of new capital year to date;
- EDBI of Singapore and NIBC Bank have come on as new backers, whilst existing investors The Clermont Group, GIC and Coltrane Asset Management have also participated in this round;
- To date, the bank’s loans have directly helped with the creation of over 8,500 new homes and 8,000 new jobs in the UK.
ACORN OakNorth Holdings has today announced that it has secured $100m from the EDBI of Singapore, NIBC Bank, The Clermont Group, GIC, and Coltrane Asset Management. The $100m represented 4.3% of the company. The capital will be used to accelerate the growth of ACORN machine and enable OakNorth to continue scaling its lending efforts in the UK.
Since the start of 2018, OakNorth has doubled its loan book from $1.1bn to $2.2bn and expects to lend a further $600m this year. Its loans have directly helped with the creation of over 8,500 new homes and 8,000 new jobs in the UK. Its clients include renowned high street brands, such as: LEON, Brasserie Blanc and Z Hotels, as well as well-known property developers such as: Regal London, Galliard and Frogmore.
Meanwhile, ACORN machine has opened offices in New York and Singapore to service clients across multiple continents and will have over $4bn of assets under service on its platform by year end. NIBC Bank is the platform’s first client in the Netherlands. ACORN machine’s team now consists of almost 100 people and in the short term expects to add another 50 people across growth and operations, engineering, machine learning and data science.
Commenting on the investment, Chu Swee Yeok, Chief Executive Officer and President of EDBI , said: “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.”
Paulus de Wilt, CEO of NIBC Bank, which is one of ACORN machine’s clients, continued: “We are proud to be partnering with ACORN machine across our SME lending business. The platform will enhance our efficiency and insights with regards to credit analysis and monitoring, thus enabling us to even better serve our mid-market clients. This collaboration will strengthen NIBC’s tech-based approach and preparation for the future.”
Rishi Khosla, co-founder of ACORN OakNorth Holdings, commented: “Given the success of OakNorth in the UK in a relatively short period of time, we have been overwhelmed by the interest and demand for ACORN machine from lenders across the globe who are looking to address the same opportunity in their own markets. As both businesses continue to grow ahead of plan, there is a need for more growth capital – having the support of such a renowned group of international investors is a testament to the strength of the platform’s proposition and their belief in its value to lenders globally.”
Proskauer acted as the legal advisor to ACORN OakNorth Holdings on the transaction.
Notes to editors
Since its inception, Acorn OakNorth Holdings has secured $572m ($455m primary) from several investors, including: NIBC, EDBI of Singapore, GIC, Toscafund, Coltrane, The Clermont Group, and Indiabulls.
The group was founded by Rishi Khosla and Joel Perlman, themselves 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 (which scaled to c.3,000 employees and was acquired by Moody’s Corporation in 2014).
Launched in September 2015, OakNorth is a UK bank that provides fast, flexible and accessible debt finance (from £500k to £40m) to fast-growth businesses and established property developers / investors.
Since its launch, the bank has:
- Been the first bank to have it’s tech stack fully in the cloud;
- Grown its loan book to £1.7bn, directly helping with the creation of 8,500 new homes and 8,000 new jobs in the UK;
- Raised deposits from c.20,000 savers;
- Won numerous awards and been recognised as one of the UK’s fastest-growing businesses being listed on the Leap 100, Tech City UK’s Future Fifty, and Fintech City’s Fintech50.
It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Visit oaknorth.com for more information.
About ACORN machine
ACORN machine is a fintech platform that helps automate the way banks penetrate the underserved and overlooked SME lending market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.
It uses technology to apply the rigorous credit analysis methodology used for large corporate loans in a much more efficient and less manual way and applies a private equity approach to portfolio monitoring.
The concept of ACORN machine was proven via OakNorth, an award-winning challenger bank founded in 2015 to address the mid-market funding gap in the UK. The platform has been embedded with banking partners across multiple countries and is enabling them to replicate OakNorth’s success in the UK in their own markets.
Visit acornmachine.io for more information.