March 13, 2017 / 9:04 PM / 5 months ago

Japan's SBI, others invest 26.3 mln euros in Germany's solarisBank

NEW YORK, March 13 (Reuters) - Japanese financial conglomerate SBI Holdings Inc and a subsidiary of German media company Bertelsmann SE & Co KGaA have backed Berlin-based solarisBank AG, a fully licensed startup bank that enables businesses to offer digital financial services to their customers, solarisBank executives said on Monday.

They said the bank has raised 26.3 million euros ($28 million) from investors including SBI Holdings, the former investment arm of Japan’s e-commerce company SoftBank Group Corp , and Arvato Financial Solutions, Bertelsmann's financial services group.

Existing investors including German technology company builder FinLeap and venture firm yabeo Capital also participated in the new round.

Italian banking group UniCredit Spa has also participated in the latest investment, executives of the startup confirmed.

SBI and Arvato will help the company expand into Asia and Europe respectively, the company said.

SolarisBank, which obtained a banking license from German regulators a year ago, enables businesses including financial technology companies and e-commerce firms to incorporate regulated financial services in their offering, ranging from lending to payments.

While fintech startups have become increasingly popular in recent years by claiming they will displace established financial institutions, many still rely on infrastructure powered by existing players like banks to carry out the underlying transactions.

SolarisBank has developed a platform that gives fintech startups and other businesses the opportunity to easily piggyback on its technology, compliance and regulatory infrastructure.

The company was created by FinLeap after its other fintech businesses had to overcome the challenges involved with finding established financial institutions that would let them plug into the infrastructure they needed to operate.

The startup will formally announce on Tuesday that it has bolstered its executive team by appointing former Deutsche Bank AG executive Roland Folz as CEO. It also named Gerrit Seidel, a partner and managing director at yabeo Capital and former executive at payments firm Klarna, as chairman of the supervisory board.

Folz said as CEO he will also focus on helping the company find a U.S. strategic partner to help it expand into America.

SolarisBank is among several young, tech-savvy companies to secure a banking license in Europe over the past 18 months.

Unlike most of its digital banking peers, such as UK-based Atom Bank and Monzo, and German firm N26, it does not offer banking services to consumers. This helps keep the cost of acquiring customers low, Seidel said. (Editing by Matthew Lewis)

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