OakNorth is set to become the first challenger bank in the UK to reach a “unicorn” valuation of $1bn (£760m), Sky News reports.
The milestone will be achieved thanks to $150m in funding by investors from Singapore, the USA and the UK. Total valuation will at that point reach $1.25bn.
The two-year-old bank, which provides secured and unsecured business and property loans of up to £20m, managed to break even in its first year of operations, and offset accrued losses in the second year.
An inside source described the valuation boost as “a shot in the arm” for the challenger bank sector, while another added: “The valuation shows that the investor community believes in the upper end of the SME space.”
OakNorth was founded by entrepreneur Rishi Khosla, and includes former Financial Conduct Authority chairman Adair Turner and former trade minister Francis Maude among its advisers.