Allica Bank has announced a £110m Series B funding round led by Atalaya Capital Management, alongside existing lead investor Warwick Capital Partners.

Investment to date in Allica Bank now amounts to £233 million.

Allica began SME lending in March 2020 and has more than £0.5bn in committed loan offers provided to customers in the last 12 months.

Alongside this organic growth, Allica has also announced its first major acquisition with an agreement to acquire c.2,000 SME customers and c.£0.6 billion of associated SME lending from AIB Group (UK) Plc.

The new £110m funding round will support continued investment in Allica’s proprietary technology and relationship management experience, alongside providing the capital to support the acquisition of AIB’s SME lending portfolio and continued organic growth.

Following full completion of the AIB transaction in 2022, Allica Bank expects to have a combined total lending book of over £1 billion and to be profitable on a monthly basis.

The expansion of Allica’s proposition and direct lending offer will leverage the bank’s network of local relationship managers and expanding product suite, including the launch of its new Business Rewards Account in early 2022.

Richard Davies, CEO of Allica Bank, said: “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. We are fast becoming the SME lender of choice with our powerful mix of proprietary technology and experienced local relationship managers.”

“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.”