Solaris Secures Lifeline: Massive Valuation Drop as SBI Takes Control

Shortly before Christmas, the parties agreed on the expected rescue financing for the Berlin fintech company Solaris. As Manager Magazin reports, the white label bank is receiving urgently needed equity of around 100 million euros from its own main investor, the Japanese investment company SBI, which in return will hold over 80 percent of the shares in Solaris.

The liquidation of the company had already been averted at the beginning of December thanks to commitments from the investor – but the clarification of the details of the new financing package then dragged on for weeks.

However, the deal has now also dramatically reduced the valuation of the Berlin fintech: once valued at 1.6 billion euros, its value is now only said to be in the low three-digit million range. In addition to SBI, major customers such as the Stuttgart Stock Exchange and the ADAC are also coming to the fintech’s aid.

The Stuttgart Stock Exchange, which has business relations with Solaris through its crypto app Bison, will become a new shareholder with a stake of over ten percent. As a customer, the ADAC is temporarily waiving agreed payments. Since autumn 2024, the credit card portfolio of the auto club’s customers has been managed by Solaris.

Bad deal for existing Solaris investors

The losers in the deal are the old investors, who are paying a high price for the rescue: a large number are withdrawing from the company and are receiving just ten cents per share. In the event of an exit, however, they could receive further compensation if Solaris is sold or listed on the stock exchange. Since it was founded around ten years ago, the white label bank has received over half a billion euros in investments.

Solaris started in 2016 with an idea to provide banking services to other fintechs or companies, such as providing accounts, cards or brokerage services. Fintech companies such as the Hamburg-based neobank Tomorrow, the crypto platform Coinbase or the SME banking provider Finom use these services.

Startup financing: Who can still get venture capital now

The rescue operation was necessary because Solaris had recently been struggling with financial and regulatory problems . The takeover of British competitor Contis in 2021 turned out to be a bad investment. The business unit was recently wound up and around a third of all Solaris employees were laid off.

However, the fintech also had difficulties with the regulator. Bafin had identified weaknesses in Solaris’ risk management and money laundering prevention and appointed a special representative . Since then, the fintech has had to invest around 50 million euros in its compliance structures and pay a fine of 6.5 million euros.

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(Featured image by Mufid Majnun via Unsplash)

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