Allica Bank makes major acquisition as it eyes £1bn SME lending goal
Allica Bank is set to announce a fresh acquisition as the firm looks to beef up its lending capacity for small businesses, CityAM can reveal.
The digital bank has snapped up London-based fintech Kriya, which specialises in embedded finance and business loans.
The takeover, set to be announced on Wednesday, marks Allica’s third acquisition after integrating Allied Irish Bank’s SME portfolio and purchasing bridging finance specialist Tuscan Capital in 2024.
The newest deal comes as Allica targets £1bn in working capital finance – which refers to short-term, quick-access funding, such as loans and credit lines – over the next three years.
Challenger banks such as Allica have dominated the small and medium enterprise (SME) lending space after high street banks retreated from the area.
Challengers now account for 60 per cent of the market, compared to 2019 where the four largest banks made up 90 per cent of lending.
Allica has targeted ten per cent penetration of the established SME market by the end of 2028.
But the fintech faces a fresh threat from the return of the high street giants. Last month, figures from banking industry body UK Finance showed high street banks’ lending to smaller firms shot up 28 per cent year-on-year in the second quarter of 2025.
It comes amid a government push on access to finance after the top bosses of Britain’s banking giants were summoned for a meeting with ministers earlier this year to discuss how to improve conditions.
Allica chief: UK has tendency to ‘shoot ourselves in foot’
Allica has long been critical of the traditional SME lending space, with chief Richard Davies previously telling CityAM the market was a “barren wasteland” five to 10 years ago.
Speaking on a panel on Tuesday, Davies – a former Revolut and OakNorth executive – said the UK was doing “great” in supporting a scaling fintech business but added “it could be so much better”.
“There’s access to good capital. There’s a huge scale of opportunity,” Davies said at Innovate Finance’s Fintech as a Force for Good event.
He said the UK has a “tendency to shoot ourselves in the foot” through blocking talent coming into the country and exiting free trade agreements.
“We keep on feeling like there’s a doom and gloom narrative that we need to live with.”
But he added the UK was still “a great country to start a business”.
Allica said Kriya, formerly known as MarketInvoice and MarketFinance, will continue to operate as its own brand following the acquisition.
The fintech, which launched in 2011, aims to streamline buyers’ cashflow with its pay later solution, which it has partnered with retailers such as Halfords on.
Kriya recorded £12.6m in revenue in 2024, according to the firm’s latest Companies House filings, a drop from £16.9m the year prior.
The firm’s losses before tax hit £9m, but marked a fall from £11.5m in 2023.
At the beginning of 2024, the firm secured a new £50m debt facility from Viola Credit which it said would help power over £1bn of business-to-business payments over the next 24 months.