Allica Bank Acquires Kriya in Push to Dominate SME Lending Market
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Updated: Tuesday, October 21, 2025, 5:01 pm
Allica bank is poised to significantly expand its lending capacity for small businesses with the acquisition of London-based fintech Kriya, a move signaling continued consolidation in the rapidly evolving SME finance sector. The deal, set to be formally announced on Wednesday, underscores Allica’s aggressive growth strategy and its ambition to become a leading provider of working capital to UK businesses.
Allica’s Acquisition Spree Continues
This takeover marks Allica’s third acquisition in a relatively short period, following the integration of Allied Irish Bank’s SME portfolio and the purchase of bridging finance specialist Tuscan Capital in 2024. The strategic acquisitions demonstrate Allica’s commitment to rapidly scaling its operations and broadening its service offerings. The bank is targeting £1 billion in working capital finance – encompassing short-term funding solutions like loans and credit lines – over the next three years.
Challenger Banks Reshape the SME Lending Landscape
Working capital finance has become a key battleground for challenger banks like Allica, which have capitalized on the ancient reluctance of customary high street banks to serve the SME market effectively.According to industry data, challenger banks now control 60% of the SME lending market, a dramatic shift from 2019 when the four largest banks held a 90% share. Allica itself aims to capture 10% of the established SME market by the end of 2028.
High Street Banks Mount a Comeback
However, the dominance of challenger banks is facing a renewed challenge.Recent figures from UK Finance reveal a 28% year-on-year increase in lending to smaller firms by high street banks in the second quarter of 2025. This resurgence comes after government intervention,with banking leaders being convened for discussions with ministers earlier in the year to address access to finance concerns.
A Critical View of Traditional Lending
Allica has long been vocal about the shortcomings of traditional SME lending practices. “The market was a ‘barren wasteland’ five to 10 years ago,” stated Allica’s chief executive, Richard Davies, in a previous interview. Davies, a former executive at both Revolut and OakNorth, reiterated a cautiously optimistic outlook on the UK fintech environment during a panel discussion on Tuesday.
“There’s access to good capital. There’s a huge scale of opportunity,” Davies said at Innovate Finance’s Fintech as a Force for Good event. He also cautioned that the UK sometimes “has a tendency to shoot ourselves in the foot” through restrictive immigration policies and the loss of free trade agreements. Despite these concerns,he affirmed that the UK remains “a great country to start a business.”
Kriya’s Role in Allica’s Strategy
kriya,previously known as MarketInvoice and MarketFinance,specializes in embedded finance and business loans,offering solutions designed to streamline cash flow for businesses.The fintech’s “pay later” solution, already partnered with retailers like Halfords, will continue to operate under its existing brand following the acquisition.
Financial filings indicate Kriya generated £12.6 million in revenue in 2024, a decrease from £16.9 million the prior year. Despite reporting a loss before tax of £9 million, this represents an improvement from the £11.5 million loss recorded in 2023. Earlier in 2024, Kriya secured a £50 million debt facility from Viola Credit, intended to facilitate over £1 billion in business-to-business payments over the next 24 months.
The acquisition of Kriya positions Allica to further capitalize on the growing demand for flexible and accessible financing solutions for small and medium-sized enterprises, solidifying its position as a key player in the evolving UK financial landscape.
