BaaS scale-up Solid raises $63m in Series B as private funding dries up

California-based banking-as-a-service fintech, Solid, has raised $63m in a Series B round, led by sector-focused growth equity firm, FTV Capital. The funding will allow Solid to expand its services into fintech-adjacent sectors including travel, construction, healthcare and education, according to the fintech.

Solid, founded in 2019 under the name Wise, provides white-label banking and transaction infrastructure, covering card issuance, digital wallets and transfers.

“We built the most comprehensive fintech infrastructure from the ground up, so others don’t have to,” said Arjun Thyagarajan, co-founder and CEO at Solid.

“Now, any company can quickly spin up bank accounts, crypto wallets, send payments, and issue cards to their end users, right in their product experience, while Solid does the heavy lifting of building and maintaining compliant fintech infrastructure.”

Firms that build and launch services on Solid own the experience and have little or no regulatory overhead. Integration is a light technical lift, a matter of calling modern APIs and a few lines of code, facilitating lightning-fast speed to market. Solid’s programs include established fintechs, such as Plate IQ and Paystand, SaaS providers including Shifl and Everflow, and rapidly growing startups, such as Lumanu and Starlight.

The platform aims to provide a light-touch integration through out-of-the-box APIs, and limited coding required.

Founded by Mojio veterans Arjun Thyagarajan (currently CEO) and Suresh Venkatraman (currently CEO), the platform has so far raised $81m in funding from 17 investors, including FTV, Headline Ventures and Colorado-based venture incubator, Techstars.

The funding round comes amid shrinking inflows into private tech companies globally, as record-high valuations and the potential of a looming recession have restrained previously high investor confidence and refocused venture firms on profitability.

VC investment in fintech fell 33% quarter-on-quarter in Q2, its lowest level since Q4 2020, according to CB Insights. The drop was partly driven by record high investments in 2021, when venture funds invested an eye-watering $121.6bn – up 153% year-on-year, and made a total of 4,987 investments in the space – up 54% year-on-year, according to PitchBook data.

As the drop in tech valuations, both for public and private companies, from earlier in 2022 remains sticky, however, fewer start-ups and scale-ups are managing to capture private interest and capital.

More: Baas choice critical for early stage fintechs – Bobsguide

Multi-sector Infrastructure and as-a-service providers may be one part of the ecosystem likely to buck the trend, as financial firms affirm their commitment to digital transformation, particularly with light-touch infrastructure solutions.

In recent months, SaaS (software-as-a-service) and IaaS (infrastructure-as-a-service) providers across the financial spectrum, including Modulr, WebEngage and CleverTap, among others, have successfully completed multi-million funding rounds.

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