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Solarisbank concludes Contis deal and plans to go public

 


Solarisbank and Contis confirm partnership with a total turnover of 100 million euros. The Bafin is concerned about the rapid growth of the bank and wants to take a critical look at it.


Berlin -based Solarisbank has signed the final merger agreement with British competitor Contis. The partnership was announced in July 2021, but has finally been completed, as Solarisbank announced on January 28 . 


Strong growth and successful acquisition

Solarisbank raised 190 million euros in a financing round six months ago . The fintech with a full banking license was valued at 1.4 billion euros and rose to the so-called “unicorn”. An accolade that is only reserved for startups that achieve a valuation of more than one billion euros.


In addition, Solarisbank took over Contis Group Ltd in order to be able to establish itself as a leading "Banking-as-a-Service" service provider throughout Europe. Although Contis is smaller than Solarisbank, the British fintech has already won the market-leading crypto exchange Binance and the Austrian neo -broker Bitpanda as customers. Thanks to the acquisition, Solarisbank was able to further strengthen its position in Europe , since Contis has a license as an e-money institute in England and Lithuania and is allowed to issue e-money and offer payment services there. The company also has offices in the UK, Lithuania and India.


Solarisbank and Contis as one unit

However, the partnership has only now been approved by all the relevant supervisory authorities, i.e. the German financial regulator Bafin , the British Financial Conduct Authority (FCA) and the Central Bank of Lithuania. From now on, Solarisbank and Contis will operate as a single entity and can offer “fiat and crypto assets, lending and payments and card issuance and processing in all EEA countries” and even grow “beyond Europe”. 


dr Roland Folz, the CEO of Solarisbank, will lead the entire institute, which employs over 700 people at eight locations in Europe and India . The business figures also confirm rapid development: According to its own statements, the fintech service provider was able to increase its combined turnover to around 100 million euros in 2021 - an increase of 90 percent compared to the previous year. 


In the future, Solarisbank and Contis have planned "sustainable growth in sales in the order of 40 to 60 percent". However, the bank will not be profitable this year. The focus is not on profit, but on “growth and investments in the European platform”, as Folz, who held a managerial position at Deutsche Bank before moving,  explains in an interview with the Handelsblatt.


Possible IPO in Q3

Solarisbank has big plans for 2022. The Berlin “unicorn” wants to offer other crypto currencies in addition to Bitcoin ( BTC ) and Ethereum ( ETH ) , and the introduction of a securities business and ETFs are also on the list. Entry into the decentralized financial markets ( DeFi ) is also planned for the second half of the year.


In addition, Solarisbank wants to go public in the third quarter of 2022 and be ready for the IPO by the middle of the year. Before going public, however, there are still a number of requirements that must be met. Among other things, the bank would have to transform the organizational and management structure and improve many things in the areas of compliance and regulation. 


Bafin special auditor for Solarisbank

Although, according to the press release , the Bafin approved the contract between Solarisbank and Contis, the German financial regulator is nevertheless targeting the Berlin fintech. Last Tuesday, the Bafin informed the bank that it will be supervised by a special auditor with immediate effect. The reason for this is a bank supervisory audit from 2020, in which deficiencies in compliance were identified.


After N26, Solarisbank is the second fintech where the Bafin is using special supervisors. The results of the auditors are then forwarded to the authority. The investigations should be completed by the middle of the year.



Data protection is another area in which Solarisbank still has glaring shortcomings. As the Blocktrainer forum reported on January 25 , some customers of the crypto platform Boerse Stuttgart Digital Exchange (BSDEX), which uses Solarisbank as a partner bank, had access to third-party transaction data. However, only a “small number” of customers are affected. According to Finance Forward magazine, the problem has now been resolved . 

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