Solarisbank Secures $224M Funding, Acquires Contis

The Rise of Embedded Finance and Solarisbank's Expansion

Embedded finance – the integration of financial services into non-financial platforms via APIs – has become a fundamental element in modern fintech development. A leading player in this evolving landscape, Solarisbank, is announcing a substantial funding round to further expand its capabilities.

Solarisbank Secures €190 Million in Series D Funding

Solarisbank, a Berlin-based startup, offers over 180 APIs enabling others to integrate financial services into their products. These services encompass core banking, card management, lending, payments, and KYC (Know Your Customer) compliance. The company has successfully raised €190 million ($224 million) in a Series D funding round, achieving a valuation of €1.4 billion ($1.65 billion). Simultaneously, Solarisbank is acquiring Contis, a competitor in the embedded finance sector.

Investment Details and Key Participants

The funding round was spearheaded by Decisive Capital Management, a Swiss firm with prior investments in insurtech company Wefox. Additional investors include Pathway Capital Management, CNP (Groupe Frère), Ilavska Vuillermoz Capital, alongside existing backers Yabeo Capital, BBVA, Vulcan Capital, and HV Capital.

Rapid Growth and Increased Valuation

This investment arrives approximately one year after a previous $67.5 million round. Notably, Solarisbank’s valuation has increased nearly fivefold since June 2020, when it stood at $360 million.

Strategic Expansion Plans

CEO Roland Folz stated that the funds will be allocated to expansion initiatives. The acquisition of Contis will enhance the company’s coverage across Europe and facilitate initial expansion into Asian markets. Currently, there are no immediate plans to enter the U.S. market.

Revenue Projections and Potential IPO

The combined entity is projected to generate revenues in the “triple-digit euros” – meaning hundreds of millions. Solarisbank reported net revenues of €35 million in 2020 and is considering a potential public offering next year.

Capitalizing on the Shift in Financial Services

Solarisbank aims to capitalize on the growing trend of consumers and businesses seeking modern banking experiences, moving away from traditional, less flexible, and potentially more costly institutions.

European Market Opportunity

Folz emphasized Europe’s potential, stating that approximately 400 million of the continent’s 800 million bank accounts are likely to switch from traditional to non-traditional banks within the next five to ten years. Solarisbank intends to secure a significant share of these accounts on its platform.

A Diverse Customer Base

Solarisbank’s clientele includes prominent companies such as Trade Republic, American Express, BP, Samsung, and Vivid. The company provides essential financial services like banking infrastructure, KYC checks, lending solutions, and digital wallet capabilities, allowing partners to concentrate on enhancing user experience and developing innovative services.

Contis Acquisition: Expanding Reach and Capabilities

Contis operates a substantial business, serving around 200 customers, managing over 2 million users, and processing €9.9 billion in annual transactions.

Origins and Founding

Founded five years ago from the Berlin-based finleap incubator and investor network, Solarisbank was initially conceived by Ramin Niroumand, a finleap founder, who currently serves as chairman of its advisory board.

The Competitive Landscape of Embedded Finance

The embedded finance sector is experiencing rapid growth, with numerous startups offering fintech-as-a-service and banking-as-a-service solutions. Key competitors include Railsbank, Rapyd, Unit, FintechOS, and 10x.

Solarisbank’s Competitive Advantages

Solarisbank differentiates itself through its comprehensive licensing – holding banking licenses in Europe and e-money licenses in Lithuania and the U.K. – and its infrastructure built on AWS. This combination enables the development of more services, scalability, and improved margins.

A Diversified Revenue Stream

The company’s diverse customer base, extending beyond neobanks to include companies like Samsung, provides resilience and allows it to adapt to evolving market demands. Approximately 70% of Solarisbank’s revenue is generated by 30% of its customers.

Geographic Coverage and Future Outlook

Currently operating in Germany, France, Italy, and Spain, Solarisbank benefits from passporting rights within the European Economic Area.

“With the combined entity, we are looking at numbers that no one else is even close to remotely,” added Folz.

Investor Confidence and Market Opportunity

Investors were drawn to Solarisbank’s approach and the significant market opportunity within the evolving financial services landscape.

“We are experiencing a paradigm shift in banking, where customers expect financial services to adapt to their specific needs,” stated Thomas Schlytter-Henrichsen, a partner at Decisive Capital Management. “Technology is the key to enable this transformation and Solarisbank’s powerful banking-as-a-service platform positions it perfectly for this new banking era. We are both inspired by the team and thrilled to work together on its mission.”