Berlin-based fintech firm Solaris announced the first close of its Series F funding round, raking in €38 million ($41.8 million). Led by existing investors, including BBVA, finleap, Lakestar, label, SBI, Decisive, and HV Capital, this funding round positions the company for its next phase of growth. While the total amount Solaris aims to raise remains undisclosed, the firm’s current valuation is estimated at around $1.6 billion, maintaining its 2021 valuation level. In 2022, Solaris experienced a challenging fiscal year, closing with net revenues of €130 million, which marks a 30% increase compared to the previous year. Despite this growth, the company suffered a loss of €56 million. The management team had already implemented measures in the previous year in response to the changed market conditions. The fintech firm asserts that its 2023 half-year results vindicate these steps, showcasing that Solaris’s scalable business model can indeed operate profitably. Solaris’ CEO, Carsten Höltkemeyer, emphasized the commitment of the shareholders, stating, “The strong commitment of our shareholders is a testament to our strategy and the dedication of our employees.” However, he also acknowledged that they are still in the early stages of their strategic implementation.
Strategic Plans for Efficiency and Profitability
Solaris plans to use the funds primarily to enhance governance, compliance and lay the groundwork for the company’s next growth phase. The next significant milestone for Solaris will be the integration of Contis, a competitor it acquired in 2021. This move aims to exploit the full potential of their technology and product platform. In a recent statement, Höltkemeyer noted, “This will be accompanied by a further reduction of complexities and a focus on our core products. Solaris will become a highly efficient, performance-driven company with sustainable run-rate profitability.”
Leadership Changes and Future Outlook
Parallel to the funding news, Solaris revealed leadership changes with the departure of Chief Operating Officer Chloé Mayenobe on July 31. She decided to pursue new professional opportunities, and her position will not be refilled. Despite the leadership changes and challenging market conditions, Solaris is forging ahead with its strategic objectives. The company operates in a substantial addressable market with a compound annual growth rate of approximately 25% and a potential revenue pool in Europe of up to €35 billion by 2027.
Solaris’ Market Impact
Since its establishment in 2015, Solaris has been a pioneer in the Banking-as-a-Service market, providing a unique blend of tech and banking services. The fintech firm currently offers about 400 different APIs across categories like banking, card services, payments, lending, ID verification, and digital currencies. This figure indicates growth, as it was only 180 APIs in 2021. A broad range of established corporations and large ecosystems, such as Samsung, American Express, and Coinbase, use Solaris for various financial services. In addition, several high-profile and international brands have recently joined Solaris’s platform, including the General German Automobile Club (ADAC), Paycell, and Jimdo.
The Future of Solaris
With more than 800 employees in ten locations across Europe and India, Solaris stands in a pole position in fintech. As the acceptance of embedded finance broadens, the company is keen on maintaining its pioneering role in the sector. Nonetheless, it acknowledges the global fintech funding decline, citing CB Insights’s figures indicating a 46% decline in 2022. But as Höltkemeyer concluded, “Over the last few months, we have been working hard on our priorities. We invested in the resilience of our platform, we are consistently hitting our monthly targets, and we have now secured the planned capital increase.” For further insights on Solaris’s performance and fintech trends, refer to this PitchBook article.