GCV portfolio company and startup challenger bank B-North has recently achieved a series of key milestones as the company gears up to launch into the SME business banking market later this year.
Despite a very challenging market backdrop, the team at B-North have made substantial progress in the second quarter of the year.
Banking licence process complete subject to capital
Having completed the bank licence process subject only to completion of capital, the PRA and FCA have now confirmed that B-North have satisfactorily completed all of the information requests required to conclude the authorisation process, including confirmation of their TCR (Total Capital Requirement).
Since submitting their banking licence application in September 2019 (a milestone that less than two-thirds of those starting the process achieve) B-North have had a series of monthly meetings with the PRA and the FCA to keep them updated on progress in the business.
Series A equity raise gaining momentum
Despite the challenges financial markets have faced as a result of Covid-19, the level of engagement has increased significantly since the beginning of June and there is strong alignment with the view that the need for, and value of, an SME-focused lending bank with no legacy loan book has increased significantly.
The team is, therefore, aiming to convert this interest into committed investment in the coming months with a Series A raise to enable it to become a bank and commence lending.
Build completion of both the Lending and Deposit-taking platforms
A notable advantage that sets B-North’s banking product apart from competition is its cutting edge, cloud native IT platform that will ‘fundamentally reengineer and enhance’ the SME lending journey.
Having invested over 5,000 person days in developing the SME lending platform the team have now completed the fourth iteration of its Customer Loan Origination system. This is a major milestone as this will be the version of the platform that will support lending activities later this year.
In addition to this the build of the deposit-taking platform, in partnership with Newcastle Strategic Solutions Limited, was also completed during quarter 2.
Once fundraising has completed, third-party expert suppliers have been identified who will complete final testing before these platforms become live.
The second quarter of 2020 has seen the developments in the business’ recruitment with the appointment of the firm’s first regional manager in Rebecca Owen
With more than two decades of business and commercial banking experience, Rebecca has led teams through demanding environments, such as the Global Financial Crisis.
Prior to the launch of lending operations the newly appointed Regional Director will build a Manchester-based team. Currently B-North’s next wave of recruitment is well underway with a strong list of candidates that have been identified pending the next round of funding.
B-North are optimistic about their recent application for a Banking Competitions Remedies fund which could provide the organisation with a £10 million award following its efforts to ‘significantly develop and improve the financial products available to SMEs’.
Encouraging results following the challenger bank’s ‘smooth and clean’ audit by respected external auditors, Deloitte, have supported preparations for the platform’s launch and reassured investors of the company’s financial viability.
GCV continues to support B-North after completing three successful funding rounds which have raised a total of £6.8 million in the previous 2 years, utilising B-North’s contacts and GCV’s private investor network G-Ventures.
B-North are committed to building a business focused bank which combines market leading personal service, best in class delivery and exceptional speed of funding. Once operational, the bank will deliver loans of between £500,000 and £5m to ambitious companies looking to scale up their business, providing finance up to ten times faster than large mainstream banks.