SoftBank’s Vision Fund is moving into Europe’s financial technology sector, leading a $440 million funding round for U.K. digital banking startup OakNorth Holdings.
The Vision Fund will invest $390 million while Singapore-based conglomerate Clermont Group will cover the remaining $50 million, in what is believed to be one of the largest European fintech fundraisers so far. The deal gives the startup a valuation of $2.8 billion, making it the most valuable fintech venture in the region, the company told the Nikkei Asian Review on Friday.
The fresh proceeds will be used to expand OakNorth’s operations into the U.S.
OakNorth focuses on small and midsize companies and has lent $3.7 billion to British businesses since its launch in September 2015, according to the company. The company also provides an analytics platform to other lenders.
The deal comes less than six months after the startup raised $100 million from Singapore’s sovereign wealth fund GIC and other investors. Indiabulls Housing Finance, an Indian financial services company, is also a major shareholder, according to Crunchbase.
The Saudi-backed $100 billion Vision Fund, managed by a subsidiary of SoftBank Group, is focused on investing in leading private tech companies related to artificial intelligence. It holds stakes in fintech companies like India’s Paytm and U.S.-based Kabbage, and the investment in OakNorth represents its first major fintech deal in Europe.
Its other European investments include Germany-based Auto1 Group, a used car trading platform. SoftBank has also transferred a stake in U.K. chip design company Arm Holdings, which it bought for $32 billion in 2016, to the fund.
“OakNorth is delivering a highly differentiated service to a key segment of the market that has historically been underserved by commercial banks,” said Munish Varma, a partner at SoftBank Investment Advisers.
