UK-based challenger lender Allica Bank has raised £100m in a Series C funding round led by technology investor TCV. 

Existing investors Atalaya Capital Management and Warwick Capital Partners also joined the round. 

Allica Bank plans to use the proceeds to accelerate its growth to cater to the UK’s small and medium-sized business (SME) market. 

The digitally native bank caters to SMEs and entrepreneurs by offering lending, savings, and payments services. 

Allica Bank received its banking licence from the Prudential Regulation Authority (PRA) in September 2019 and in the summer of 2022, the bank achieved £1bn of lending and monthly profitability.

Allica Bank chief executive Richard Davies said: “It is a massive vote of confidence in the team we have built at Allica to attract backing from such a world-class technology investor under the toughest of market conditions, and this £100m funding round will enable us to support far more of Britain’s established and growth companies, who have been underserved for too long.”

TCV Partner Michael Kalfayan said: “TCV is laser-focused on partnering with market-leading companies seeking to leverage technology to transform industries. Allica is a prime example of this and we are incredibly excited to collaborate with this strong team as they work to be the country’s leading digitally-native SME bank.”

Companies such as Airbnb, Netflix, and Spotify also count TCV as their investor. 

In June this year, Allica Bank secured £55m in funding, which comprised £25m in equity from its existing investors and £30m in form of a Tier 2 capital facility from British Business Investments.