(Bloomberg) -- Japan’s SBI Holdings Inc. agreed to take a stake of more than 70% in Solaris SE as part of a new fundraising round for the German fintech that will slash the struggling company’s valuation, according to a person familiar with the matter.

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Solaris secured about €100 million ($103 million) from SBI for the stake and it will also raise money from German exchange operator Boerse Stuttgart Group and existing investors, bringing the total funds raised to about €150 million, the person said, asking not to be identified discussing internal information. Other elements such as new AT1 bonds are also part of the deal, the person added.

“A group of investors and partners have developed a coordinated financing concept that has been submitted to our shareholders for approval,” a spokesman for Solaris said by email on Monday, without identifying the investors. The agreement is expected to be finalized this month, he added.

The money will secure funding until Solaris expects to reach profitability in about two years, the person said. SBI led a €96 million funding round in March.

Germany’s economic struggles have placed a greater burden on the country’s larger fintechs, which have high capital requirements in the country, according to a September KPMG report. Rising interest rates, regulatory scrutiny and lower investor support have forced some companies that were once worth over one billion dollars, like Solaris and Wefox Holding AG, to cut their valuations.

A spokesperson for SBI declined to comment. A spokesman for Boerse Stuttgart, which is a major Solaris client, said it is working with partners on a financing concept for the sustainable strengthening of the company.

Solaris, which provides white-label services to other lenders, was valued at about $1.6 billion in 2021, according to Pitchbook.

The company has struggled to break even amid a dispute with German financial regulator BaFin, writedowns on an acquisition and costs related to the onboarding of a credit card portfolio of German motorist club ADAC. It has slashed headcount to about 450 from more than 700 in an effort to bring down costs, Bloomberg News reported last month.

Solaris counts Banco Bilbao Vizcaya Argentaria SA, ABN Amro Bank NV and Visa Inc. among its backers, as well as venture capital firms such as Lakestar and HV Capital, according to the company’s website.

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(Updates with Boerse Stuttgart comment and additional context.)

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