Japan’s SBI Holdings has reportedly agreed to acquire a stake of over 70% in German fintech company Solaris.
This move is said to be part of a new fundraising initiative that will reduce the valuation of the German company, Bloomberg reported, citing a person familiar with the matter.
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The agreement, which is anticipated to be finalised within this month, will see Solaris receive approximately €100m ($103m) from SBI for the stake.
Additionally, Solaris is expected to secure funds from Boerse Stuttgart Group and existing investors, raising the total to about €150m.
Other aspects part of the deal includes new AT1 bonds, the source added.
The capital raised in this round is aimed at providing Solaris with the financial stability required to achieve profitability in an estimated two years.
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By GlobalDataA Solaris spokesman was quoted by news outlet as saying: “A group of investors and partners have developed a coordinated financing concept that has been submitted to our shareholders for approval.”
In March last year, SBI led a €96m funding round of Solaris.
The fintech company, known for offering white-label services to other financial institutions, was valued at around $1.6bn in 2021, as per Pitchbook.
However, Solaris has faced challenges in reaching a break even amid regulatory dispute with German financial watchdog BaFin, asset write-downs following an acquisition, and expenses associated with integrating a credit card portfolio from the German motorist club ADAC.
To mitigate costs, Solaris reduced its workforce from over 700 to approximately 450 employees.
Financial entities such as Banco Bilbao Vizcaya Argentaria, ABN Amro Bank, and Visa, along with venture capital firms namely Lakestar and HV Capital are among Solaris’ backers.
