OakNorth secures £66m boost as Indiabulls acquires 40% stake

Small businesses across the country could be set for a multi-million pound boost after business lender OakNorth Bank secured a £66m equity investment from one of India’s largest non-bank SME lenders.

OakNorth, which has offices in Manchester and London, saw its capital base surge above the £85m mark after Indiabulls snapped up a 40% stake in the business.

Gurgaon-headquartered Indiabulls was founded in 2000 by its chairman, Indian billionaire Sameer Gehlaut.

Rishi Khosla, the CEO and co-founder of OakNorth Bank, said of the deal: “Sameer Gehlaut has built Indiabulls from scratch into a major force in Indian business over the last 15 years, and now sees an opportunity in the UK banking sector and OakNorth specifically.

“We are building this business for the long-run so we wanted to find a long-term, patient investor and Indiabulls is the ideal partner.”

He added: “This is a massive vote of confidence in OakNorth, and this major investment will enable us to accelerate and expand our ambitious growth plans to take on the major banks’ ‘computer says no’ approach to small business lending.”

OakNorth plans to use the boost to shore up its investment strategy and stimulate growth by supporting entrepreneurs and small business owners throughout the UK.

Discussing the transaction, Sameer Gehlaut called OakNorth “the most exciting bank to have launched in Britain since the barriers to entry were reduced”.

He believes that while many new banks are run under the ‘challenger’ banner, many operate in the same way as the big banks but on a smaller scale.

Sameer continued: “OakNorth has a strong niche that is fundamentally important to the UK economy, is genuinely disruptive, and has useful synergies with a part of our business that is also focused on lending to small companies.

“Having invested in Rishi and Joel’s successful previous venture, Copal Amba, we are very confident in our investment decision and are convinced that OakNorth Bank will go on to achieve great things.”

In September, OakNorth received the greenlight from regulators to launch its first two savings accounts geared towards entrepreneurs.

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