European Fintech firm Solaris in reportedly seeking additional funding to maintain its operations.
The German banking-as-a-Service (BaaS) platform is said to looking for an emergency capital injection of £100 million. Solaris reportedly aims to put its business up for sale should it fail to acquire additional funding to maintain its business operations.
The reports have surfaced following a challenging time at the Berlin-headquartered company, which has recently stepped away from its Engage business in the United Kingdom (sold to Suits Me). The Fintech firm also announced its plans to lay off a third or 33% of its employees. The layoffs are now expected to affect 240 of the company’s 700 workers.
The search for additional capital comes only eight months after Solaris reported a €96 million iSeries F round and obtained a financial guarantee of as much as a €100 million capital equivalent, allowing it to complete a vital contract with motor association Adac.
That particular investment was announced after Solaris reported a significant €56 million loss for financial year 2022.
But the company is now dealing with a capital crunch due to slower than expected sales revenue from its Adac contract as well as the scale of the write off of its UK based EMI division.
As per reports in Germany’s Finance Forward, another investment round of between €100 million and $150 million is set to be finalized in the next few days, however, Solaris is also considering a potential sale of the business if the funding cannot be secured.
Solaris is reportedly valued at about €1.6 billion.
Potential buyers might include Japanese business conglomerate SBI or even BNP Paribas, but nothing is officially confirmed.
As covered in September 2024, Solaris, Europe’s embedded finance platform had taken the difficult decision to discontinue major parts of its Electronic Money Institution business (formerly known as Contis).
Solaris is reshaping into a stronger, “more resilient and agile organization that leads the market with innovative financial solutions.”
As part of this reorganization, the Solaris Management Board has taken the difficult decision to “discontinue major parts of the EMI (formerly Contis) operations, which regrettably will bring redundancies across the EMI team.”
Carsten Höltkemeyer, Solaris CEO said that it had been a challenging time for this segment of he business and they had struggled to sign up new firms and grow revenues as hoped.
“Whilst this decision was extremely difficult to make and considered a last resort, it was necessary to ensure Solaris remains a resilient organization and focused on its path to achieving profitability. Solaris remains fully committed to its partner and regulatory requirements and will support all employees affected by these changes.”
