Allica Bank is poised to announce a new acquisition as it seeks to bolster its lending capacity for small businesses, according to City AM.
The digital bank has acquired London-based fintech firm Kriya, known for its specialisation in embedded finance and business loans, as reported by .
The acquisition, due to be announced on Wednesday, represents Allica's third takeover following the integration of Allied Irish Bank's SME portfolio and the purchase of bridging finance specialist Tuscan Capital in 2024.
This latest deal comes as Allica aims to achieve £1bn in working capital finance – referring to short-term, quick-access funding such as loans and credit lines – over the next three years.
Challenger banks like Allica have taken the lead in the small and medium enterprise (SME) lending sector after high street banks withdrew from the area.
Challengers now hold 60 per cent of the market, a significant increase from 2019 when the four largest banks accounted for 90 per cent of lending.
Allica has set a target of achieving ten per cent penetration of the established SME market by the end of 2028.
However, the fintech faces renewed competition from the resurgence of high street giants. Last month, data from banking industry body º£½ÇÊÓƵ Finance revealed that lending to smaller firms by high street banks surged 28 per cent year-on-year in the second quarter of 2025.
This comes amidst a government initiative to improve access to finance, following a meeting earlier this year between ministers and the top executives of Britain's banking giants to discuss ways to enhance conditions.
Allica chief: º£½ÇÊÓƵ has tendency to 'shoot ourselves in foot'
Allica has consistently criticised the conventional SME lending sector, with chief executive Richard Davies previously describing the market to City AM as a "barren wasteland" five to 10 years ago.
Speaking during a panel discussion on Tuesday, Davies – a former Revolut and OakNorth executive – acknowledged the º£½ÇÊÓƵ was performing "great" in nurturing scaling fintech enterprises but emphasised "it could be so much better."
"There's access to good capital. There's a huge scale of opportunity," Davies remarked at Innovate Finance's Fintech as a Force for Good event.
He argued the º£½ÇÊÓƵ demonstrates a "tendency to shoot ourselves in the foot" by restricting talent immigration and withdrawing from free trade agreements.
"We keep on feeling like there's a doom and gloom narrative that we need to live with."
However, he maintained the º£½ÇÊÓƵ remained "a great country to start a business."
Allica confirmed Kriya, previously operating as MarketInvoice and MarketFinance, will maintain its independent brand identity following the takeover.
The fintech, established in 2011, seeks to enhance buyers' cashflow through its deferred payment solution, having formed partnerships with retailers including Halfords.
Kriya generated £12.6m in revenue during 2024, according to the company's most recent Companies House submissions, representing a decline from £16.9m the previous year.
The business's pre-tax losses reached £9m, though this represented an improvement from £11.5m in 2023. In early 2024, the company secured a fresh £50m debt facility from Viola Credit, which it stated would facilitate over £1bn of business-to-business transactions in the forthcoming 24 months.
