London-based Allica Bank, a fintech SME challenger bank, announced that it has raised £110M (approx €130.2M) in its Series B round of funding. The firm has now raised a total of £233M (approx €275.9M) in funding and ranks as one of the UK’s top 20 fintechs by funds raised, according to Beauhurst.
Allica claims to be the only challenger bank in the UK dedicated to providing a full range of credit and payment services to established and growing SMEs.
The fundraise follows Allica Bank’s recent acquisition of a £0.6B (approx €710.5M) SME lending portfolio and 2,000 SME customers from AIB Group, which has decided to withdraw from the UK SME market.
The proceeds from this round will be invested in Allica’s proprietary technology and relationship management experience as well as to support the acquisition of AIB’s SME lending portfolio and continued organic growth.
Following the completion of the AIB deal in 2022, Allica Bank expects to have a combined total lending book of over £1B and to be profitable on a monthly basis. The expansion of Allica’s proposition and direct lending offer will leverage the bank’s distinctive network of local relationship managers and expanding product suite, including the launch of its new Business Rewards Account in early 2022.
Richard Davies, CEO of Allica Bank, says, “This £110M funding round, alongside the acquisition from AIB, will enable us to support and scale even more of Britain’s established SMEs and growth companies, at a time when SMEs are looking for more tailored support from their bank.”
Davies adds, “We’re laser focused on growing our lending to multiple billions over the coming years as we seek to support the underserved and overlooked SMEs across the UK.”
The current round was led by Atalaya Capital Management alongside existing lead investor Warwick Capital Partners.
Ian Burgess, Managing Partner of Warwick Capital and Allica’s majority shareholder, says, “We are excited to continue our support of Allica and the bank’s transformational acquisition of AIB’s SME portfolio. Allica has been building impressive momentum since its full launch last year and this acquisition will build on and accelerate the development of Allica’s award-winning proposition for Britain’s underserved SMEs.”
Empowering established SMEs to succeed
Founded in 2017 by Jason Scott, Allica Bank exists to empower small and medium businesses to succeed. Built on tailored expertise, local relationships and modern tools, the firm claims to deliver expert banking for business Britain. It was granted its UK banking licence in September 2019.
Allica believes small and medium-sized businesses (SMEs) are the driving force of the British economy. However, they’ve been left behind by the big banks, who have stripped away their local relationship managers and tailored SME support. Allica Bank has been built especially to serve established SMEs like these.
Richard Davies explains, “While most digital and challenger banks are focused on specialist lending markets or secondary payment accounts, this transaction demonstrates how Allica is leading the charge in taking on the mainstream ‘high street’ banking market for established, growing SMEs. We are fast becoming the SME lender of choice with our powerful mix of proprietary technology and experienced local relationship managers.”
Since first opening its doors to SME lending in March 2020, the bank has lent more than £0.5B to customers in the last twelve months alone.