Embedded finance — the process by which some of the more complicated, but also commoditized, aspects of financial services are built and wrapped in an API for anyone else to implement in their own products for end users — has become a huge cornerstone of how fintech is built today. Now, one of the earlier and bigger movers in the space is announcing a major round of growth funding to build out its own. Solarisbank, a Berlin startup that provides a range of financial services by way of some 180 APIs that others use to build end-user-facing products (including basic banking and card services, lending, payments, and know-your-customer services) has raised €190 million ($224 million) in a Series D that values the company at €1.4 billion ($1.65 billion) and announced the acquisition of one of its competitors in the space, Contis. Decisive Capital Management, a Swiss firm that has also backed insurtech startup Wefox, led the round, with Pathway Capital Management, CNP (Groupe Frère) and Ilavska Vuillermoz Capital also participating, in addition to and previous backers Yabeo Capital, BBVA, Vulcan Capital and HV Capital.
SolarisBank counts Trade Republic, American Express, BP, Samsung and Vivid among its customers, powering basic banking, know-your-customer checks, lending, digital wallet and other services related to finance for companies that can, in turn, focus their energies on building more user-friendly customer experiences or other services altogether. Embedded finance is all the rage now, and a number of startups today are providing fintech-as-a-service or banking-as-a-service tools to third parties. Other notable names in the same segment of the market include Railsbank, which also announced funding earlier this month; Rapyd, which raised a big round at a $2.5 billion valuation earlier this year; Unit, another banking-as-a-service startup picking up funding and growing; FintechOS, which really does what its name says (and is also currently raising money); and the startup 10x, which ironically is targeting incumbents. The market opportunity, combined with Solarisbank’s approach and its current customer base, is what attracted investors.