Fintech for Good – OakNorth show the Incumbents how it’s done
OakNorth, the largest fintech in Europe, announced this week 2 very positive pieces of news:
Firstly, they reported a pre-tax profit of £33.9 million in 2018, up 220% on 2017. Impressive statistics for these turbulent times and a reflection of the innovative approach OakNorth has played; providing real world solutions, paying off.
OakNorth is one of the more well known of a number of new British fintechs that have attracted both investors and customers in the past few years. There has been a huge buzz around several other British fintechs. Though, as the figures show, OakNorth has led the way in putting together a sustainable business model.
A sustainable model for fintech
Launched in September 2015, OakNorth offers loans of £0.5m to £40m to fast-growth UK businesses and established property developers and investors. Its fintech platform, OakNorth Analytical Intelligence, has helped ensure that it maintains a high credit quality and a clear view of how each business within its portfolio is performing. To date, OakNorth has not had a single default, and the last 12 months saw it receive, over £400 million of repayments.
As stated by its COO, Amir Nooriala, at a conference last week:
‘As of January, this year there are about 300 unicorns, privately held. Out of 300 how many of them are profitable? Around two dozen, that’s it. There is a lot of money going in - venture capital, crowd funding. I’d say in five years there is going to be a crunch point, and they will need to start making money. So, the first point is that there will be a lot of pressure to acquire, merge, or consolidate’
Secondly, they have stated they are to start donating 1% of all future net profit to charitable causes and social entrepreneurship. A commitment Amir states is central to their business model:
“OakNorth is only able to make this 1% commitment because it’s profitable”.
This is a brilliant example of a UK Fintech, going beyond the hype bubble, and creating a successful business model; whilst also giving a little bit back!
Hear from Amir at FinTech Connect 2019, ExCeL London, December 3-4 where he will be delivering a presentation at our DX Connect keynote stream.
Register for your Early Bird tickets to FinTech Connect on 3–4 December at ExCeL, London.
View the FinTech Connect 2019 website to find out more