The fintech has closed a new round of financing.
(Photo: Solarisbank)
Frankfurt Higher costs are weighing on Solaris’ results: the Berlin fintech posted a deficit of 56 million euros last year, an increase of around 33 percent compared to 2021. The company announced this on Tuesday.
“The year 2022 has put Solaris to the test,” the statement said. Above all, increased personnel costs and costs for processing Bafin orders had an impact here. During an audit in 2020, the financial supervisory authority found some serious deficiencies in Solaris. She then sent a special auditor to the bank and also increased the capital requirements.
At the beginning of January, Bafin then tightened control of the fintech. Since then, the company has had to get the green light from Bafin before it can take on new customers.
“Investments to remedy regulatory deficiencies such as consulting costs or additional personnel expenses in the double-digit million range are decisive for the increased costs,” said a Solaris spokesman.
Personnel costs at Solaris SE alone increased by around eleven million euros. The number of employees in the entire group, including the British competitor Contis, which was acquired in 2021, rose from around 425 to a total of 800 employees. Personnel costs therefore increased by a total of 75 percent to around 70 million euros. The company’s turnover rose last year by 30 percent to 130 million euros.
Solaris enables other start-ups to use the institute’s banking license and do their first business with it. The fintech also offers banking services to established companies, for example issuing credit cards.
Despite rising costs, the company is still approaching the profitability threshold – at least adjusted for one-off costs, for example for the ongoing restructuring or the consequences of the Bafin special audit, said Solaris boss Carsten Höltkemeyer on the industry portal “Finance Forward”.
New round of financing completed
In the current year, the company should “demonstrate profitable growth and be in the black for the first time for the year”, Höltkemeyer had already announced in an interview with the Handelsblatt in January.
Fresh capital should also help. As the Berlin fintech also announced, it was able to complete a new round of financing. The Handelsblatt had already reported on the upcoming cash injection.
In total, Solaris collects 38 million euros from existing investors – and according to its own statements, still has a valuation of 1.6 billion euros. The funds are to be used, among other things, to improve governance and compliance.
Solaris also announced a restructuring of the board. The previous head of organization Chloé Mayenobe will leave the company at the end of the month. The position will not be filled. Rather, CEO Höltkemeyer will take on a large part of Mayenobe’s tasks himself.
More on the subject: Financial regulator restricts new business from fintech Solaris