SME-focused challenger bank Allica Bank has announced a £110 million Series B funding round.

The round was led by Atalaya Capital Management, who joined existing lead investor Warwick Capital Partners.

Allica is focused on providing credit and payment services to established, growing SMEs.

Since it first began providing SME lending in March 2020, Allica said it has more than £0.5 billion in committed loan offers provided to customers in the last twelve months.

Allica said it has also announced its first major acquisition with an agreement to acquire 2,000 SME customers and £0.6 billion of associated SME lending from Irish bank AIB Group.

Allica said the new capital will support continued investment in proprietary technology and relationship management experience, alongside providing the funding to support the acquisition of AIB’s SME lending portfolio and continued organic growth.

Investment to date in Allica Bank now amounts to £233 million – ranking Allica as one of the UK’s top 20 FinTechs by funds raised, according to market research firm Beauhurst.

“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,” said Richard Davies, chief executive, Allica Bank. “We are fast becoming the SME lender of choice with our powerful mix of proprietary technology and experienced local relationship managers.”

“This £110 million 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.”

He added: “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.”

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