September 21, 2023

Selling SVB to HSBC was the wrong decision for UK startups, says OakNorth CEO

The CEO of one of Europe’s rare profitable unicorns says the bank is too big to support high growth companies as well as an OakNorth-SVB tie-up would have

Amy O'Brien

3 min read

Rishi Khosla, CEO and cofounder of OakNorth Bank

The UK government’s greenlighting of a rescue deal to sell the UK arm of Silicon Valley Bank to HSBC was the wrong decision for the country’s startup industry, according to Rishi Khosla, CEO of OakNorth Bank.

Khosla — whose $2.4bn neobank was one of the rival parties bidding for SVB UK in a chaotic weekend-long rescue deal in March this year — also revealed that OakNorth bid “100 times more” than HSBC, but still lost out. 

SVB UK was sold to HSBC for £1, so that makes OakNorth’s bid £100. SVB UK had been valued at £1.4bn prior to the startup bank run that put it on the brink of insolvency almost overnight in March. Its £6.7bn of deposits and £5.5bn loan book paled in comparison to HSBC’s $3tn global balance sheet.

“It was the right decision on a very short-term basis, i.e., that day, week or month. But anything beyond that, it was the wrong decision,” Khosla tells Sifted in an interview.

“HSBC is such a large bank, they have their swim lanes. If you fit in a swim lane, great. But if you don’t, you’re out — because that’s just the size of the business. Thus, I don’t think HSBC is going to be as committed to the high growth segment as we would be.” 

HSBC has absorbed SVB UK into its new “Innovation Banking” offering, which also includes newly formed innovation teams in the US, Israel and Hong Kong. HSBC Innovation Banking UK has more than 650 employees in the UK and the Nordics.

OakNorth is a B2B neobank that specialises in lending to scaling businesses, which has proven much more lucrative than its consumer-facing peers: OakNorth is one of Europe’s only profitable fintech unicorns, having posted an annual profit every year since 2017.

Now, Khosla says the bank is “proactively and reactively” considering growth through acquisitions and has “seriously looked at” four businesses this year — one of which was SVB UK.

“I think it’s a lost opportunity,” Khosla says. “OakNorth is all about supporting entrepreneurs building their businesses, which is fundamentally what SVB was about. [It] would have been immense.”

“It would have created this scaled-up version of us and would have doubled our size. Are we going to continue doing that? Of course, but we just haven’t had the benefit of doubling our size as a function of putting those businesses together.” 

Europe needs its own Nasdaq

Having a seven-year track record of profitability makes OakNorth one of the most circled UK tech companies when it comes to the question of an initial public offering (IPO).

But Khosla says the UK and Europe are lacking a valid listing venue for tech companies — and that this is the “elephant in the room” for growth companies considering their IPO location.

“The core issue we need to solve is where is the clear listing venue for high growth businesses in the UK and Europe,” Khosla says.

“You don’t have growth investors investing in the London market, so without that depth of investor base you’re not going to trade very well.”

“So to IPO you need an exchange and you need liquidity — and right now in Europe we don’t have either.” 


The UK recently launched a new FinTech Growth Fund in an attempt to try and bridge the growth stage funding gap that fintech scaleups are facing while the IPO market is closed. But Khosla says this only kicks the can down the road.

“A few million extra may be helpful in this climate but is it going to materially move the needle on some of those businesses? Probably not. It’s a bridge to an IPO but they have no listing venue.”

Amy O'Brien

Amy O'Brien is a reporter at Sifted. She covers fintech and writes our weekly fintech newsletter . Follow her on X and LinkedIn