Small business lender Allica Bank has closed a $155 million (£114.5m) Series D funding round that has catapulted it into unicorn territory with a valuation reaching almost $1.2 billion (£886.3m).

The challenger bank, which serves over 30,000 SMB businesses across the UK, said the capital injection will fuel growth plans and deepen its investment into proprietary technologies, including the use of AI in lending, while also allowing for expansion outside of the UK for the first time.

Announcing the raise, which came from Ventura Capital, GLG, Sona AM and existing investors TCV and Blue Owl, the bank said it has already claimed 5% of its target market so far, and now plans to double that to 10% among established SMBs by 2028.

“Looking ahead, we see Allica as a frontrunner in applying AI across front and back office processes in financial services, and we are excited to support the team’s ambition to fundamentally improve SMB banking across Europe,” said Michael Kalfayan, general partner at TCV.

Technology underpins Allica’s growth strategy, with chief lending officer Niv Subramanian previously highlighting how the bank’s API‑driven processes speed up data gathering and admin tasks, capabilities that, combined with AI, could deliver automated lending decisions within 24 hours.

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In an interview with The Banker earlier this year, Richard Davies, CEO of Allica, said that he expected at least a 50% gain in “speed and straight efficiency” over the next year by relying more on LLMs, and elsewhere noted that the bank is currently working on agentic solutions.

“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,” said Davies.

While Allica has not yet announced the reporting date for its full-year 2025 results, it will be aiming to repeat its 2024 performance, a record-breaking year for the bank in which it’s loan book grew to over £3 billion, pre-tax profits were up 86% to hit £29.9 million, with gross revenue of £293.1 million.