Small and medium-sized businesses in the UK often struggle to get the right banking support.
They’re too big for basic services but not big enough to get much attention from major banks. This leads to slow service and limited credit options.
Here’s where Allica Bank aims to address these issues. The London-based digital bank has raised $155 million in a Series D round to accelerate its UK growth, deepen technology investment and begin expanding internationally for the first time. The financing values Allica at close to $1.2 billion.
The round was led by Ventura Capital, GLG and Sona AM, with participation from existing investors TCV and Blue Owl. Most of the raise consists of common equity, alongside a portion structured as additional Tier 1 capital.
Designed for established businesses
Allica is a fintech bank led by Richard Davies, designed specifically for established businesses with 5-250 employees. These companies represent a significant part of UK employment but are often neglected by larger banks that offer impersonal and inconvenient services.
Allica aims to provide better banking for these businesses by offering accounts that reward users, dedicated relationship managers, and helpful technology.
Since launching lending in 2020, Allica has grown rapidly, becoming profitable within three years and emerging as one of the fastest-growing fintech companies in the UK.
They have offices in London, Milton Keynes, and Manchester, as well as a network of relationship managers across the country. Allica has three main investors: Warwick Capital Partners, Blue Owl, and TCV.
Mo El Husseiny, Managing Partner of Ventura Capital: “Allica is a world-class business that is executing exceptionally well in a large, underserved market. Ventura is proud to be a major investor in Allica’s Series D, and we are ready to support this exceptional team’s next stage of growth into international markets.”
John Doran, General Partner at TCV: “Allica’s proprietary full-stack technology is world-class – and provides a truly differentiated edge in SMB banking.”
Michael Kalfayan, General Partner at TCV: “Allica solves what customers have long been asking for – speed, reliability and trust – reflected in its outstanding performance in recent years. Looking ahead, we see Allica as a frontrunner in applying AI across front and back office processes in financial services, and we are excited to support the team’s ambition to fundamentally improve SMB banking across Europe.”
What’s next?
The new funds will mainly be used to increase lending and invest more in Allica’s technology. A major goal is to use artificial intelligence to update lending processes and enhance underwriting for established small and medium-sized businesses (SMBs).
In the last five years, Allica has grown its balance sheet to nearly £4 billion in small and medium-sized business (SMB) loans and over £5 billion in deposits. In 2023, they introduced the Business Rewards Account, which has won awards.
Allica currently serves over 30,000 established SMBs in the UK, which is about 5% of its target market. They aim to reach 10% market penetration among established SMBs by 2028.
Richard Davies, CEO of Allica, said, “We’re building the category-defining digital bank for established SMBs, and are excited to be taking our proprietary platform into new markets. This Series D investment is a major vote of confidence in Allica’s strategy and performance.”
