Solaris Struggling to Raise Funds

Having trouble raising new money

Solaris, a German banking-as-a-service (BaaS) fintech, is apparently having trouble raising new money, calling into question its ability to fulfill on a significant credit card contract, as reported by the Financial Times.

The Munich-based Automobile Club ADAC (ADAC) awarded Solaris a 10-year contract to help it issue ADAC-branded credit cards to its 21-million-strong membership last year. One of the largest organizations in Europe has issued over 1.3 million credit cards.

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Solaris hoped that the new arrangement would improve its yearly sales by more than €100 million, as reported by the Financial Times. Since Solaris is taking longer than expected to get the necessary funding, sources tell the FT that ADAC has now sought prospective replacement credit card partners.

According to the article, Solaris needs to acquire €100 million to pay ADAC and satisfy the relevant regulatory criteria for the project.

Poor macroeconomic situation

Money it is apparently raising now is in addition to the €38 million it raised from existing investors in July as part of its Series F financing. The corporation claimed it would utilize the funds to improve corporate governance and conformity.

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According to the FT’s sources, Solaris is in the midst of fundraising conversations with existing investors like Visa and BBVA, but the poor macroeconomic situation and global slowdown in investment activity have been roadblocks.

Berlin’s Solaris was established in 2015 to facilitate the provision of financial services to customers by means of API integrations by firms other than financial institutions and fintechs. To “stay ahead of the curve, maintain our growth, and become profitable at the same time,” the corporation revamped its management board in December 2022.