Despite the Wirecard fallout, German fintech startup solarisBank has raised a Series C funding round of $67.5 million (€60 million). Following today’s funding round, solarisBank is now valued at $360 million (€320 million). However, solarisBank doesn’t have any consumer product directly. Instead, it offers financial services to other fintech companies through a set of APIs.
With solarisBank, you can build a fintech startup and leverage solarisBank’s line of products to do the heavy lifting. It’s an infrastructure company in the banking space.
While solarisBank might not be a familiar name, some of its clients have become quite popular. They include challenger banks such as Tomorrow, Insha and a newcomer called Vivid; business banking startups, such as Penta and Kontist; trading app Trade Republic; cryptocurrency startups Bison and Bitwala, etc.
Overall, solarisBank works with 70 companies that have attracted 400,000 clients in total.
HV Holtzbrinck Ventures is leading the round with existing investor yabeo committing a substantial follow-on investment. Other new investors include Vulcan Capital, Samsung Catalyst Fund and Storm Ventures. Existing investors BBVA, SBI Group, ABN AMRO Ventures, Global Brain, Hegus and Lakestar are investing again.
The company started the fundraising process back in December. Due to the economic prospects, it has been a mixed process. “A lot of investors looked at their portfolio companies and the appetite to look at something new was not there,” solarisBank CEO Roland Folz told me. But everything worked out eventually as around half of the funding comes from existing investors.
“We originally were looking for €40 million but we were overwhelmed by the interest of investors in spite of COVID,” solarisBank Head of Strategy and Shareholder Relations Layla Qassim told me.
The startup’s vision could be summed up in two words — regulation and modularity. The company is a fully licensed bank, which means that its clients don’t have to apply to a banking license themselves.
And solarisBank lets you pick the modules you want to use for your product. Maybe you’re building a mobile cryptocurrency wallet and you just want to be able to give an IBAN and a debit card to your users. Maybe you’re building a used car marketplace like CarNext and you want to offer credit. Maybe you want to build a challenger bank but address a specific vertical.
With solarisBank, you can open bank accounts and issue payment cards attached to those accounts. You can also issue cards and attach them to a different account in case you’re integrating with existing bank accounts. The startup also offers various services around payments, vouchers, cross-border transactions and more.
More recently, the company launched with American Express a new feature called Splitpay. When customers check out on an e-commerce platform in Germany, American Express customers will be able to choose a repayment plan to pay over multiple months.
The company generates revenue from its clients as they pay to use the company’s APIs and enable accounts and cards. And, solarisBank collects the interchange fees on card transactions and shares revenue with its clients. Similarly, solarisBank can offer to share revenue on credit interests with its clients.
In the future, solarisBank plans to make its portfolio of financial services even more compelling by introducing local IBANs in the most important European markets. It should make it easier to convince potential clients outside of Germany to use solarisBank as their banking infrastructure.