Allica Bank makes major acquisition amid £1bn SME lending goal

Wednesday 22 October 2025 01.00
| Updated:

Tuesday 21 October 2025 17.01

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Allica Bank will announce a new acquisition as the company looks to increase its lending capacity to small businesses, AM City can reveal.

The digital bank has taken over London-based fintech Kriya, which specializes in embedded finance and business lending.

The takeover, which will be announced on Wednesday, marks Allica’s third acquisition after integrating Allied Irish Bank’s SME portfolio and buyout bridging finance specialist Tuscan Capital in 2024.

This latest deal comes as Allica targets £1 billion of working capital funding – which refers to short-term, quick-access funding, such as loans and lines of credit – over the next three years.

Challenger banks like Allica have dominated the small and medium enterprise (SME) lending space after leading banks withdrew from the region.

Challenger now controls 60 percent of the market, compared to 2019 when the four largest banks controlled 90 percent of loans.

Allica targets ten percent penetration of the established SME market by the end of 2028.

But fintech faces new threats from the return of top giants. Last month, figures from banking industry body UK Finance showed leading banks’ lending to smaller firms jumped 28 per cent year-on-year in the second quarter of 2025.

This comes amid the government’s push for access to finance after top British banking giants were summoned to a meeting with ministers earlier this year to discuss ways to improve conditions.

Allica has long been critical of the traditional SME lending space, as its chairman Richard Davies previously stated AM City This market was a “badland” five to 10 years ago.

Speaking on a panel on Tuesday, Davies – a former Revolut and OakNorth executive – said the UK had done “great” in supporting the rise of fintech businesses but added “it could be much better”.

“There’s good access to capital. There’s huge opportunity,” Davies said at Innovate Finance’s Fintech as a Force for Good event.

He said Britain had a “tendency to beat itself up” by blocking talented people from entering the country and leaving free trade agreements.

“We continue to feel like there is a doom and gloom narrative that we have to live with.”

But he added the UK was still “a great country to start a business”.

Allica said Kriya, previously known as MarketInvoice and MarketFinance, will continue to operate as its own brand following the acquisition.

The fintech, which launched in 2011, aims to simplify shoppers’ cash flow with its pay later solution, which has partnered with retailers such as Halfords.

Kriya recorded revenue of £12.6m in 2024, according to the company’s latest Companies House filing, down from £16.9m in the previous year.

The company’s loss before tax was £9m, but down from £11.5m in 2023.

In early 2024, the company secured a new £50m debt facility from Viola Credit which it said would help finance £1bn of business-to-business payments over the next 24 months.