SBI Holdings to take controlling stake in Berlin-based Solaris
SBI Holdings is poised to acquire a controlling stake of around 70% in German FinTech Solaris for approximately €100 million, as part of a larger €150 million fundraising round. This deal, expected to close this month, significantly reduces Solaris's valuation from its $1.6 billion peak in 2021, largely wiping out existing shareholders, which also includes SBI's previous stake from a €96 million funding round in March 2022.
Boerse Stuttgart Group and existing investors will contribute the remaining €50 million. The financing package also includes new AT1 bonds. The influx of capital aims to steer Solaris toward profitability within two years. The company confirmed the financing plan is awaiting shareholder approval.
At an extraordinary general meeting in December 2024, investors decided against liquidating Solaris, although the FinTech reported a loss of almost €180 million for 2023 after important customers like Binance and Trade Republic left the bank and it had to write off €123 million from its e-money business. The number of accounts managed by Solaris dropped from 7.5 to almost two million.
To fight its way back up, the bank took over ADAC's (the German motor association) credit card business from Landesbank Berlin (LBB) in 2022. However, to financially secure this breakthrough, investors had to provide an additional €96 million in funding. This came after the neobank had already raised over €500 million since 2017. As if that wasn't enough, there was trouble with BaFin, which imposed a €6.5 million fine on the bank and extended the mandate of the special representative.
The question is how sustainable this rescue will prove for Solaris. While the neobank was recently able to reduce costs by laying off about a third of its workforce - potentially saving around €30 million according to the company - and excluding losses from the e-money business write-off, there's still a deficit of approximately another €30 million.
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