The Berlin-based fintech Solaris closed the fiscal year with net revenues of €130 million, a growth of 30% compared to the previous year, but a net loss of €56 million, and a 33% increase compared to 2021. Solaris announced the €38 million first close of its Series F round, led by existing investors at a valuation of €1.6 billion. Solaris will use the funds primarily to strengthen governance and compliance.
Higher costs are weighing on Solaris‘ bottom line. Increased personnel costs, in particular, reduced earnings last year but the fintech still wants to reach the profit zone in 2023.
“The year 2022 has put Solaris to a tough test,” the statement said. Also, the costs to process BaFin orders were the main factors here. During an audit in 2020, the financial supervisory authority identified deficiencies at Solaris, some of which were serious. As a result, it sent a special auditor to the bank and increased the capital requirements.
BaFin then tightened its control of the fintech at the beginning of January. Since then, the company has had to get the green light from BaFin before it can take on new customers.
Personnel costs at Solaris SE alone increased by about eleven million euros. The number of employees in the entire group, including the British competitor Contis acquired in 2021, increased from about 425 to 800. Personnel costs, therefore, increased by 75% to around €70 million. The company’s revenue increased by 30% to €130 million last year.
Solaris enables other startups to use the institution’s banking license and do their first business. The fintech also offers banking services to established companies, such as issuing credit cards.
Despite rising costs, the company says it continues to approach the profitability threshold – at least adjusted for one-off costs such as the ongoing restructuring or the consequences of the Bafin special audit, Solaris CEO Carsten Höltkemeyer told the German industry portal Finance Fwd.
