Allica Bank is set to announce its acquisition of London-based fintech Kriya, enhancing its lending capacity for small businesses. This acquisition, expected to be announced on Wednesday, marks Allica’s third, following the integration of Allied Irish Bank’s SME portfolio and the purchase of bridging finance specialist Tuscan Capital in 2024. The acquisition aligns with Allica’s goal to achieve £1 billion in working capital finance over the next three years.
Challenger banks like Allica have gained a significant foothold in the SME lending market, filling the gap left by high street banks. Currently, challengers account for 60% of the market, a significant increase from 2019 when the four largest banks dominated 90% of lending. Allica aims to capture 10% of the established SME market by the end of 2028. However, the return of high street banks poses a new threat. Recent figures from UK Finance indicate a 28% year-on-year increase in high street banks’ lending to smaller firms in the second quarter of 2025. This resurgence follows a government initiative to improve access to finance, with banking leaders meeting ministers to discuss enhancements.
Allica’s CEO, Richard Davies, has voiced criticism of the traditional SME lending space, describing it as a “barren wasteland” five to ten years ago. Speaking at Innovate Finance’s Fintech as a Force for Good event, Davies acknowledged the UK’s support for scaling fintech businesses but suggested improvements are possible. He highlighted the UK’s access to capital and significant opportunities but noted the country’s tendency to hinder progress by restricting talent inflow and exiting free trade agreements. Despite these challenges, Davies maintains that the UK remains a favourable environment for starting a business.
Kriya, formerly MarketInvoice and MarketFinance, will continue to operate under its brand post-acquisition. Since its launch in 2011, Kriya has aimed to streamline cash flow for buyers with its pay later solution, partnering with retailers like Halfords. According to its latest Companies House filings, Kriya recorded £12.6 million in revenue in 2024, a decrease from £16.9 million the previous year, with pre-tax losses of £9 million, down from £11.5 million in 2023. In early 2024, Kriya secured a £50 million debt facility from Viola Credit to support over £1 billion in business-to-business payments over the next two years.
