What happened: German banking-as-a-service provider Solaris is at a crossroads. As previously covered (EF Review Nov 19th), the first mover in the EU-BaaS market must close fresh funding to survive. In addition, Solaris’ investors also explored a sale. There are no indications that the company progressed with external funding or a sale. In an extraordinary general meeting last week, however, Solaris’ shareholders made the first and most essential decision: Solaris should not be liquidated. This means Solaris needs new funding soon, likely from existing investors (Yahoo Finance). Japanese SBI Holdings has backed Solaris since its Series A in 2017 and appears willing to provide the necessary funding.
My comment: Solaris’ challenges were reasonably known in the industry. However, a liquidation at this point would have been a major surprise, at least to me. I would assume that based on the limited time and options, funding from existing investors seems most likely. SBI’s first offer was declined, but the negotiation will likely continue. This might be SBI’s chance to become the majority shareholder of Solaris for a relatively attractive price tag. What will they do with that? We might see soon.
