Solaris on Verge of Securing €100M in Urgent Funding, Says Company

German fintech Solaris, a well-known provider of Banking-as-a-Service (BaaS) solutions, is in the final stages of securing a critical funding deal, according to recent reports. The company is urgently seeking between €100 million and €150 million to stabilize its operations and continue its growth trajectory. Should Solaris fail to raise the necessary funds by the start of December, it is reportedly exploring the possibility of selling the company, with some potential buyers already showing interest.

Founded as a white-label banking services provider, Solaris has raised a total of approximately €500 million since its inception. The company has become one of Germany’s most prominent fintechs and has earned recognition as a leader in the BaaS sector, offering banking infrastructure to a wide range of partners. Solaris is currently valued at around €1.6 billion, making it a significant player in the European fintech ecosystem. However, despite its strong market position, the company has faced a series of financial and operational challenges in recent months, raising concerns over its ability to maintain momentum.

Earlier this year, Solaris completed a €96 million Series F fundraising round, which also included a financial guarantee of up to €100 million. At the time, the company appeared poised for continued success. However, recent reports indicate that Solaris is now seeking additional capital to address mounting issues, with the urgency surrounding the funding round largely attributed to a combination of accounting discrepancies, slower-than-expected sales, and difficulties stemming from its restructuring efforts.

A key contributor to the company’s current financial difficulties is the write-off of its UK Electronic Money Institution (EMI) business. Solaris has been scaling back its operations in the UK, and the write-down has been more significant than anticipated, impacting the company’s financial stability. In addition, revenue from its key ADAC contract, a major partnership, has been slower to come in than expected, further exacerbating the situation.

The fintech company has also found itself embroiled in legal disputes. One of the most notable issues involves its former client, Binance, the popular cryptocurrency exchange. Solaris had been providing Visa debit cards for Binance as part of a partnership, but Binance terminated the agreement, leaving Solaris with a significant gap in expected revenue. In response, Solaris has filed a lawsuit against Binance, claiming the exchange owes it €144 million in minimum guaranteed fees for the remainder of the contract, which runs through November 2026. This legal battle has added further uncertainty to the company’s financial outlook.

As Solaris grapples with these challenges, the company’s management has been working tirelessly to secure the necessary funding to ensure its survival and future growth. The funding round is expected to raise between €100 million and €150 million, with the majority of the capital likely coming from existing investors. These include notable financial institutions such as BBVA, finleap, Lakestar, yabeo, SBI, Decisive, and HV Capital, who have previously backed the company’s growth. However, the company is also reportedly exploring a sale of the business if it cannot secure the required funding in time.

Among the potential buyers are several prominent financial institutions, including SBI, the Japanese investor that is already a shareholder in Solaris. Other interested parties are said to include Deutsche Bank and BNP Paribas, both of which are reportedly eyeing Solaris as a potential acquisition. These banks’ interest in Solaris reflects the growing importance of BaaS platforms in the financial sector, as traditional banking institutions look to partner with fintech companies to modernize their services and compete with digital-first challengers.

The urgency surrounding the funding round has been further fueled by the company’s need to address both short-term financial challenges and longer-term strategic goals. The write-off of its UK EMI business and the delayed revenue from the ADAC contract are just part of the broader picture, which also includes ongoing efforts to streamline operations and focus on core business areas. As Solaris moves forward, it will need to stabilize its financial situation and secure its future as a leading provider of BaaS solutions.

Solaris’s CEO, Carsten Höltkemeyer, who is guiding the company through this turbulent period, has acknowledged the challenges the company is facing but remains optimistic about the future. In a recent statement, Höltkemeyer confirmed that the company is “close to finalizing an agreement” regarding the funding, although he refrained from commenting on the specifics of the deal. The announcement has fueled speculation that Solaris is on the verge of securing the capital it needs to navigate its current challenges and continue scaling its operations.

If Solaris successfully raises the necessary funds, it will be able to maintain its position as a leader in the BaaS space and continue providing its suite of services to clients across Europe and beyond. However, if the funding round falls through and the company is forced to seek a buyer, the impact on Solaris’s employees, clients, and investors could be significant. The outcome of this critical funding round will likely shape the future of Solaris and determine whether the company can continue its growth or if it will be forced to explore other options.

In summary, Solaris is at a crossroads, with its ability to secure new funding or find a buyer likely determining its future. While the company has faced significant challenges in recent months, it remains a major player in the BaaS sector, with strong backing from existing investors and interest from potential acquirers. The next few weeks will be crucial for the company as it works to finalize a deal and ensure its continued success in the rapidly evolving fintech landscape.