Allica Bank Hits US$1.2bn Valuation After Latest Fundraiser

Allica Bank has secured US$155m in Series D funding, further establishing primary digital challenger for the UK’s established small and medium business (SMB) sector. The Series D round includes investment from Ventura Capital, GLG, Sona AM and existing backers TCV and Blue Owl. 

The capital injection, now valuing the company at US$1.2bn, consists largely of common equity alongside new additional Tier 1 (AT1) equity capital. It follows a period of unprecedented growth for the firm.

Tech-led lending for the “missing middle”

Unlike many neo-banks that focus on micro-businesses or consumer segments, Allica has built its reputation by targeting established SMBs – those typically employing between 5 and 250 people. By using a proprietary full stack technology platform, the bank has successfully scaled its balance sheet to nearly £4bn (US$5.4bn) in SMB loans and over £5bn (US$6.7bn) in deposits.

The new funds are earmarked for deep investment into this tech stack. Specifically, Allica intends to integrate advanced AI to refine its lending models, aiming to offer more tailored financial products to a segment often underserved by traditional high street banks.

Richard Davies, CEO of Allica says: “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.”

Global ambitions and market penetration

With over 30,000 customers already on the books, Allica currently holds a 5% share of its target market. The bank has set an ambitious goal to double this penetration to 10% by 2028. However, the Series D round also signals a shift in strategy: for the first time, Allica is planning to take its proprietary technology outside of the UK market.

This international move follows the 2023 launch of its Business Rewards Account, which helped transition the bank from a specialist lender into a comprehensive clearing bank for the SMB community.

The raise has been welcomed by Westminster as a sign of the UK’s continued dominance in the global fintech landscape. Allica’s ability to attract both new and existing international investors suggests a high level of confidence in the scalability of its digital-first model.

Lucy Rigby, KC, MP Economic Secretary to the Treasury, says: “The UK is a fintech powerhouse and this Government is doubling down on measures that will enable the sector to grow. This government is helping to unlock investment into firms like Allica, supporting better finance for innovative British businesses, and showcasing UK financial services on the global stage.”

As Lucy notes, the government remains focused on ensuring that high-growth firms have access to the capital required to compete internationally. For Allica, the focus now shifts to deploying this capital to automate complex commercial lending and preparing the infrastructure for its first overseas territories.