Offshore challenger bank OakNorth eyes local lending tie-up

Entrepreneurs Rishi Khosla and Joel Perlman launched OakNorth from London in 2015. Targeting small businesses and entrepreneurs, it has a UK banking licence and offers a range of products in Britain. After SoftBank’s Vision Fund contributed to a $440 million raise earlier this year, it has evolved into a $US2.8 billion ($4.07 billion) business.

Local challenger bank Judo cited the startup as one of its influences when it decided to launch.

One difference between OakNorth and many other fintechs is its positive financial position: the company posted a £33.9 million ($63.35 million) pre-tax profit last year off the back of more than £60 million in operating income.

Founders of UK challenger bank OakNorth, Rishi Khosla and Joel Perlman

Mr Chandra said the business was now looking to license its platform, which it uses to assess loan applications to the UK bank, by partnering with banks across the world. The product is designed to give small businesses a more individualised treatment by crunching big data to create “highly structured and bespoke” loans.

This allows the banks to be “fast and responsive,” he said.

OakNorth’s Singapore hub will act as a base for for its expansion in the Asia Pacific region, though Mr Chandra said the company was looking at possibilities for a future Australian base.

“We’re talking to several of the large [bank] players and some of the newer players,” he said.

It’s not clear which banks will be interested in trialling the product.

OakNorth will enter an increasingly crowded market for global fintech players, with software firm TrueLayer announcing last month that it will set up shop here ahead of Australia’s open banking rollout.

Mr Chandra said OakNorth’s platform was focused on opening up more capital to smaller operators in need of between $1 million and $30 million in finance, given traditional banking had made it difficult to service these companies.


The federal government has long agreed that this segment of the market is underserved and is currently consulting over the establishment of a business growth fund, similar to the UK’s business bank, aimed at allowing banks and super funds to take stakes in small businesses.

Mr Chandra said plans like these were a positive step.

“[If] that leads to more liquidity, more stability and better customer service, those are always good outcomes for everyone.”

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