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Japanese multinational holding conglomerate SoftBank led a $440-million investment round in British digital lender OakNorth Bank, a firm in which Indiabulls Housing Finance is a shareholder.
While SoftBank’s $100-billion Vision Fund has pumped in a capital of $390 million (₹2,800 crore) in OakNorth Bank, the remaining funding ($50 million) has come from an existing investor, Clermont Group.
The $440-million funding will be used to expand OakNorth’s SME loan origination and credit capabilities to North American banks and lending institutions, helping them build the scale and quality of their SME loan books.
It will also continue to drive growth of the OakNorth Analytical Intelligence (ON AI) platform, which is already being used by banks across the US, Europe and Asia.
This funding deal would give three-year-old OakNorth a valuation of $2.8 billion, making it Europe’s most-valuable private fintech.
This round takes OakNorth’s total primary and secondary funding to over $1 billion, more than any other fintech in Europe. It may be recalled that Indiabulls Housing Finance seeded OakNorth Bank with an investment of ₹650 crore for a 40 per cent controlling stake in November 2015 at a valuation of $250 million.
Last year, Indiabulls Housing Finance sold a part of its holding in OakNorth to GIC of Singapore for ₹900 crore. As on date, Indiabulls Housing Finance has a 15 per cent stake in OakNorth Bank.
Commenting on the SoftBank-led investment round in OakNorth, Gagan Banga, Vice-Chairman and MD, Indiabulls Housing Finance, said: “OakNorth Bank has turned out to be an excellent investment for us, as it is evident from the numbers and the manifold increase in valuation since our investment. Our investment is now valued at ₹3,000 crore.”
Besides Indiabulls Housing Finance and SoftBank, OakNorth Bank now counts GIC (of the Government of Singapore), Clermont, Coltrane, Dascoli and Toscafund as other large investors.
In a short span of three years, OakNorth has built a loan book in excess of $1.7 billion, garnering deposits of over $1.5 billion. OakNorth Bank now has a net worth of $1 billion and raises deposits exclusively online through digital channels.
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