OakNorth will become the first of Britain's digital challenger banks to reach the 'unicorn' status coveted by technology start-ups when it unveils a £150m fundraising backed by a group of international investors.
Sky News has learnt that OakNorth Bank, which launched just two years ago, has secured new funds from backers including Clermont Group; a Singaporean investor in energy, healthcare and financial services, Coltrane Capital; a US-based Fund and Tosca Fund; a London-based investor.
The new capital will value OakNorth, whose advisors include Lord Turner, the former chairman of the City watchdog, at about £950m, according to insiders.
That takes it beyond the $1bn threshold which sees tech companies described as unicorns, and will put OakNorth in the same bracket as the likes of TransferWise, the payments app.
Sources described OakNorth's funding round as delivering "a shot in the arm" for the entire UK challenger banking sector at a time when some analysts are expressing doubts about new entrants' ability to gain significant scale.
OakNorth, which was co-founded by Rishi Khosla, focuses on lending sums of up to £20m to entrepreneurs, and broke even before it had marked its first year of operation.
The company had also repaid all of its accrued losses before it turned two years old, a mark of its rapid progress, according to insiders.
"The valuation shows that the investor community believes in the upper end of the SME space," said one insider.
Mr Khosla has sought to make a virtue of the gap in the UK banking market for financing SMEs, and has already lent more than £800m to customers in Britain.
Its other advisers include Lord Maude, the former Trade Minister.
OakNorth has also tried to differentiate itself through the quality of its cloud-based technology platform, underlining the extent to which advances in areas such as machine learning and artificial intelligence (AI) are now playing a central role in the banking sector's development.
Sources said that OakNorth was in advanced talks with a number of banks in North America about licensing its Acorn Machines AI technology for use, underlining an important growth opportunity for the company.
In its latest annual report filed at Companies House, OakNorth said it had benefited from uncertainty created by the Brexit vote.
"We were able to establish ourselves as a credible contender to the main high-street banks, tripling out loan book in the months following (the Brexit vote)" it said.
OakNorth declined to comment on its fundraising on Thursday.