What's the price for Solaris' new lifeline?

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Hi embedded finance friend

I am spending quite a bit of time these last weeks of the year on events for 2025. Nothing is 100% finalised yet; however, it looks like that:

• We will host our first private dinner in London,

• Increase the number of public events in Germany from two to three, and

• Host our first event(s) outside of Germany

We have sponsors and partners for most of these activities in the final confirmation steps. That being said, we are still looking for 1-2 sponsors for our event in Berlin in April 2025. This will likely be bigger than our usual events. If you are interested in partnering up, hit reply.

And a shoutout to reader Alice Gresset from Parafin for referring three new subscribers!

And now let’s dive in 👇

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German BaaS provider Solaris avoids liquidation, but what’s the path ahead?

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.

BaaS provider partners with investment infrastructure provider for a savings account offering

What happened: Two British infrastructure providers have teamed up to offer a new savings account product. Wealthkernel is an investment-as-a-service provider that enables fintech companies and non-financial brands to offer investment products to their customers. Wealthkernel has partnered with the banking-as-a-service provider Griffin to offer savings accounts (The Paypers).

My comment: Before this product launch, Wealthkernel could only offer investment products such as money-market funds, ETFs, actively managed funds and other equity products. For example, property software provider GetGround leverages Wealthkernel’s technology to offer money-market funds to real estate investors for their cash position. Money-market funds are frequently offered as an alternative to traditional savings accounts, but there are some consumers and businesses who prefer to use savings accounts. Wealthkernel operates in the UK and launched its business in the EU recently. Due to Griffin’s pure focus on the UK, this new feature will only be available for Wealthkernel’s UK clients (until they find a similar partner in the EU).

So far, the partnership seems to be fully focused on Griffin enabling Wealthkernel to provide savings accounts. I am curious whether this partnership will also go in the other direction and if we will see Griffin, at one point, offering investment products powered by Wealthkernel.

UniCredit enables embedded lending provider Banxware to increase lending scope

What happened: German embedded lending provider Banxware increased its lending scope to five million Euros per business thanks to its partnership with UniCredit (LinkedIn). The Italian bank invested in Banxware funding round in late 2023, and both companies announced in May 2024 that UniCredit’s German subsidiary HypoVereinsbank would integrate Banxware. Thanks to this bank-fintech partnership, HypoVereinsbank business customers can apply for a loan for up to EUR 250.000, receive a response in 10min and get a payout within 24 hours. With the new announcement, UniCredit now empowers Banxware to increase its lending scope and offer loans for up to five million Euros per company. This means that a non-financial brand like restaurant platform Lieferando, which has integrated Banxware, can now offer higher loans to their restaurant partners than before.

My comment: Banxware and UniCredit have checked all the boxes of potential collaboration: financial investment and leveraging each other infrastructures in both ways. European bank’s activity in embedded finance has increased significantly over the past 1-2 years. This partnership is an excellent example of how banks can enter embedded finance without being the as-a-service provider, which comes with a lot of compliance and technology burden. That being said, UniCredit is not shy about that since they recently acquired banking-as-a-service provider Vodeno. Does this make UniCredit one of the leading European banks in embedded finance?

Spoiler: In 2025, I will increase my focus on activities from (traditional) banks in embedded finance, so stay tuned for more specialised content and events. 

Banking Infrastructure provider Banking Circle for sale

What happened: Banking Circle is the partner of choice for many regulated financial services companies. This includes well-known fintech companies such as Stripe and Nuvei, but Banking Circle also works with regulated non-financial brands and infrastructure providers. Banking Circle is owned by private equity firm EQT, which is looking to sell the company for at least $3-4 billion (Bloomberg; The Paypers). 

My comment: When a European firm gets its e-money licence, it will likely at least consider Banking Circle for safeguarding and payment rails access. Banking Circle has multiple strong competitors, including traditional banks, so they don’t win every significant deal but have developed into a key player. Banking Circle was originally a part of Danish Saxo Bank but was acquired by EQT and others in 2018. After over six years, the investors have likely reached their investment cycle and partnered with well-known Financial Technology Partners to get some return on their investment. The price tag of at least $ 3-4 billion limits the names of potential acquirers; anybody wants to take a guess?

Core banking provider Mambu acquires payment company Numeral

What happened: Dutch core banking provider Mambu has acquired French payment provider Numeral (Fintech Futures). 

My comment: The acquisition is an excellent fit for Mambu. Mambu is a strong player in the lending infrastructure but, in my opinion, less on the payment side. Thus, the acquisition will likely help them to improve their payment offering and become less dependent on lending projects. That being said, I wonder if this was the ideal outcome for Numeral. The company lists multiple well-known customers and bank partners (Numeral founder on LinkedIn); however, a sale without mentioning a price and just a bit over three years after funding makes you wonder if this was the desired outcome.

Short stories

• Managing AML risk in the context of embedded finance (Medium)

• Banks need to reclaim their position at the centre of the BaaS model (American Banker; Paywall)

• NatWest to launch fintech growth programme for UK startups (The Paypers)

• Embedded Finance: A Financial Services Boon for Retailers (Total Retail)