Allica Bank has agreed to acquire London-based FinTech Kriya, moving the challenger lender into embedded payments and strengthening its offer of working capital finance for small and medium-sized enterprises.

The all-share deal is Allica’s third acquisition following the purchase of Allied Irish Bank’s GB SME lending customers in 2021 and bridging finance specialist Tuscan Capital in 2024. Financial terms were not disclosed.

Allica said the transaction supports its goal to advance £1 billion of working capital finance to SMEs over the next three years and contributes to a broader push to reach ten per cent penetration of the established SME market by the end of 2028. Since launching lending in 2020, Allica’s outstanding SME lending has reached approximately £3.5 billion, according to company statements.

Kriya, formerly MarketInvoice and MarketFinance, provides embedded payments and business lending, including a pay later solution used by retailers such as Halfords. The firm has processed over £4 billion across invoice finance, SME loans and embedded finance since 2011. Kriya will retain its brand, with its co-founder and chief executive officer Anil Stocker continuing to lead the business. Around 30 Kriya employees will join Allica’s reported workforce of about 680.

Richard Davies, Allica’s chief executive officer, said the combination was a strategic fit. “Kriya has built an impressive business over more than a decade, and Anil and his team share our belief that SME finance needs reinventing, and that together we can offer something the market desperately needs,” he said. “Our ambition is clear. We plan to lend £1 billion of working capital finance to SMEs over the next three years. This is our third acquisition but our first in the embedded payments space and it aligns well with our future potential international expansion.”

Stocker said the deal would provide scale while keeping focus on customers. “Combining forces with Allica gives us the right platform to scale what we’ve built. We share the same DNA – a genuine commitment to reinventing SME finance and competing with the big banks who’ve walked away from the SME market,” he said. “Our customers will continue to get the same service and support from Kriya, but now with the backing and reach of one of the UK’s fastest growing banks.”

City A.M. noted that challenger banks now account for about 60 per cent of SME lending, up from a market dominated by the four largest banks in 2019, though recent data shows high street banks have increased lending to smaller firms. The government has also pressed for improved access to finance.

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