Exclusive: Allica Bank closes £110m Series B fundraise

The SME challenger bank is plotting profitability by the middle of 2022, following on from its £600m loan book acquisition from AIB.

Allica Bank has closed a £110m Series B new cash raise, its largest funding round to date.

The new cash is made up of £102.5m equity capital and £7.5m of tier 2 debt capital.

It was revealed yesterday that AIB, the Irish banking giant, had sold a £600m loan book of SME debt to Allica in a move that the latter bank says will help bolster its revenues in order to turn a profit by mid-way through 2021.

Allica’s AIB transaction marks its first acquisition since receiving its full bank licence in September 2019.

Richard Davies (pictured), CEO, Allica Bank, who has been at the helm of the business since 2020, said a statement that the bank is “laser-focused” on growing its lending to the multiple billions of pounds annually in the next few years.

“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,” he said.  

“This £110m 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.

The round is being led by new investor Atalaya Capital, AltFi understands, an increasingly prominent investor in the fintech and alternative lending world.

For example, New York-based Atalaya Capital has struck recent deals with UK-based lender Capital on Tap in which bagged a £450m funding facility to fund its UK growth a few weeks back.

The asset manager also provided a debt facility to Koyo Loans $50m debt and equity funding in September. 

Existing lead investor Warwick Capital Partners, which remains its largest shareholder, also is investing in Allica’s new round.

Warwick led the bank’s last major funding round in September 2020 when it raised £26m. In total Allica’s total investment haul amounts to £233m. 

Justin Burns, Managing Director at Atalaya said:“We are thrilled to support the next growth phase of Allica in its mission to empower SMEs to succeed.”

Ian Burgess, Managing Partner of Warwick Capital, said:“We are excited to continue our support of Allica and the bank’s transformational acquisition of the [£0.6bn] SME portfolio from AIB. Allica has been building impressive momentum since its full launch last year and this acquisition will build on and accelerate the development of Allica’s award-winning proposition for Britain’s underserved SMEs”