The deal also sees Indiabulls has taken a 40 per cent stake in OakNorth. The money will be piut towards helping the bank to accelerate its investment plan to support British entrepreneurs and small business owners.
OakNorth and Indiabulls both provide SME lending and the deal will enable knowledge sharing on product development, technology, credit decision-making and digital marketing, which will be value accretive in the long run for both companies.
OakNorth was founded by entrepreneurs Rishi Khosla and Joel Perlman, who were inspired to launch the bank following the financial challenges they faced from high street banks as founders and promoters of Copal Amba, which they grew to 2,500 employees before selling to Moody’s Corporation in 2014.
The bank’s board includes Chairman Cyrus Ardalan, a former Vice Chairman at Barclays Bank, and Adair Turner (Baron Turner of Ecchinswell), former Chairman of the FSA, as Senior Independent Director.
OakNorth CEO and co-founder Rishi Khosla praised Indiabulls founder Sameer Gehlaut for his pioneering work establishing the disruptive lender.
“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”, he said.
“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.”
Gehlaut added that there is a “major opportunity in UK banking, and we believe the OakNorth proposition fills a significant gap in the market”.
“It is the most exciting bank to have launched in Britain since the barriers to entry were reduced,” he continued. “Many banks have called themselves ‘challengers’, but actually operate just as the big banks do, only smaller and with fewer economies of scale.
“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.”