The Fintech Effect

Challenger bank OakNorth says it just closed the largest funding round of any UK fintech firm to date

Key Points
  • Singapore's state-owned GIC poured £90 million ($120 million) into OakNorth Friday
  • Combined with another investment the lender scored last month, a total of $318 million has been raised
  • Chief Executive Rishi Khosla told CNBC that this would make the funding round "the largest U.K. financing to date"
Alex Rumford

British challenger bank OakNorth said Friday that Singaporean sovereign wealth fund GIC would take a 10 percent stake in the firm.

The state-owned investor has poured £90 million ($120 million) into the financial technology (fintech) company. Combined with another investment the lender scored last month, a total of £244 million ($318 million) has been raised.

"If you aggregate the two announcements about the primary and secondary rounds, it is the largest U.K. fintech financing to date," OakNorth Chief Executive Rishi Khosla, told CNBC Friday.

On Thursday, another U.K. fintech firm, Transferwise, said it had raised $280 million from asset management firm Old Mutual and Silicon Valley venture capital firm IVP.

Collectively, Transferwise and OakNorth's investments saw $400 million injected into the U.K.'s fintech sector in just two days.

OakNorth said the latest investment would enable it to boost lending in the U.K. by an additional £1.5 billion ($2 billion).

The firm plans to roll out its ACORN lending platform — which helps banks originate, underwrite, monitor and book transactions faster — to markets across the globe.

Khosla said: "What this financing round does is help us continue building the business in the U.K. but also taking the model to other markets around the world."

Khosla added that OakNorth would look into partnering with a more established bank further down the line, "as we look at other markets."