Allica Bank has applied for a banking licence in Sweden, marking the digital business bank's first planned expansion outside the UK.

The startup said it has submitted an application to Sweden's financial regulator, Finansinspektionen, and has already established a legal entity in the country as part of the licensing process.

The move follows Allica's $155 million Series D funding round in February, which valued the bank at almost $1.2 billion. At the time, the bank said it would use the investment to support its next phase of growth, including international expansion.

If regulators approve the application, Allica said, a Swedish banking licence would also allow it to expand into other European Union markets over the longer term.

The bank said it chose Sweden because of its established business lending market, highly digital economy and respected regulatory environment. It also believes established businesses in Sweden face many of the same banking challenges as firms in the UK.

Allica has already appointed a leadership team for its Swedish business. Rickard Westlund will lead the operation as chief executive, alongside chief technology officer Javier Ubillos, chief product and operating officer Victor Ramstrom, and chief financial officer Samuel Tawadros.

The bank is also recruiting additional product, technology and operations staff.

Since securing its UK banking licence in 2019, Allica has focused on businesses with between five and 250 employees, a segment it says has been underserved by traditional banks and digital challengers. The lender has issued more than £4 billion in loans to UK businesses and now has over 15,000 business current account customers.

Richard Davies, chief executive of Allica Bank, said that Sweden has one of Europe's most digital economies, with a well-respected regulator, making it a natural choice for Allica's first expansion outside the UK.

"Its established businesses face many of the same challenges we have seen in the UK, where firms that make a major contribution to the economy have too often been underserved by traditional banks," he added.

"We would not be taking this step without the proven model we have built in the UK. Allica has grown by delivering on its promises to established businesses, with a full stack product offering and combining market-leading technology with the expertise and service these businesses need."

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