Allica Bank announced this past week the acquisition of Kriya, the SME lending Fintech specialising in SME working capital and embedded finance. The move aims to boost Allica’s SME lending proposition and sees the UK based Fintech move into the embedded payments market.
The businesses are described as being a strategic fit, bringing together strengths across lending as well as payments, with a focus on leveraging technology to transform the SME market and leadership “who’ve known each other for a long time.”
Allica is broadening its working capital and embedded finance proposition at a time when “confidence among SMEs seeking funding has fallen from 56% to 31% since 2019, while only one in ten SMEs now have access to bank overdrafts or traditional loans – the lowest recorded level since 2019.”
Since opening its doors to lending back in 2020, Allica’s growth means its total lending to SMEs has now reached £3.5 billion. With the Kriya acquisition, Allica is targeting advancing an “initial £1 billion of working capital finance to SMEs over the next three years.”
The acquisition now aims to accelerate Allica’s drive to penetrate 10% of the established SME finance market by the end of 2028, “replacing the legacy high street banks who have been in retreat from serving this important segment that makes up a third of the UK economy.”
Kriya is Allica’s third acquisition, following the purchase and integration of AIB’s GB SME lending customers in 2021 and bridging finance specialist Tuscan Capital.
The bank became profitable within 3 years of launching its operations, with its award-winning lending and current account proposition – the Business Rewards Account – gaining traction with SMEs, “offering no monthly fees, a named relationship manager, cashback and technology that drives faster and more flexible lending decisions.”
Since launching operations back in 2011, Kriya (previously known as MarketInvoice and MarketFinance) has processed more than £4 billion in invoice finance, SME loans and embedded finance. The fintech’s working capital solutions have helped businesses across 300,000 transactions. Kriya’s embedded PayLater solution – “integrated with B2B retailers like Halfords – helps SME buyers manage cashflow by making it easier to access PayLater options at check-out.”
Kriya will now continue to operate under its own brand, which has recognition in the SME finance market. CEO and Co-founder Anil Stocker will continue to lead the business, with all Kriya employees “joining Allica as part of the transaction.”
Richard Davies, CEO of Allica Bank, said that for too long SMEs have struggled to access the flexible finance they need “as the high street banks have retrenched. Allica is building something different – a better way to serve Britain’s established SMEs.”
Davies explained that Kriya has built a business “over more than a decade, and Anil and his team share our belief that SME finance needs reinventing, and that together we can offer something the market desperately needs.”
They now plan to lend £1 billion of working capital finance to SMEs over the next three years. This is their third acquisition but their “first in the embedded payments space and it aligns well with future potential expansion.”
Anil Stocker, CEO of Kriya, said that combining forces with Allica gives them the right platform to scale what they have built. Stocker added that they share the same DNA – a commitment to “reinventing SME finance and competing with the big banks who’ve walked away from the SME market.”
They also mentioned that there has never “been a more relevant time to help SMEs survive a challenging and changing economic landscape.”
They are looking forward to working together, particularly with their embedded finance offering, which they’re looking to roll out across Europe in the foreseeable future.
Stocker further noted that customers will continue to get “the same service and support from Kriya, but now with the backing and reach of one of the UK’s banks.”