UK challenger bank OakNorth has raised $100 million in funding, valuing the the three-year old startup at $2.3 billion and providing fresh capital to grow its lending business and ramp up sales of its proprietary Acorn Machines AI technology.
The new round - supported by EDBI of Singapore, NIBC Bank, Clermont Group, GIC and Coltrane Asset Management - comes just six months after the firm reported $10.6 million in profit, moving into the black from a £2.4 million loss in 2016.
One of a host of new entrants to the UK banking market, OakNorth bills itself as a bank for entrepreneurs, providing loans to small firms, and accepting deposits online.
The bank has made a virtue of its cloud-based technology platform, using machine learning techniques and artificial intelligence tools to build a £2.2 billion loan book within three years of launch.
The firm is consequently accelerating its efforts to become a technology supplier to the banking industry, opening new offices in New York and Singapore to service clients across multiple continents. NIBC Bank is the platform’s first user in the Netherlands, applying the technology to help penetrate the underserved and overlooked SME lending market.
The Acorn Machines 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.
Chu Swee Yeok, chief executive officer and president of the EDBI of Singapore, says: “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.”