Lydia raises another $ 100million for her European financial super app – TechCrunch

Just weeks after news of stock and crypto trading, the French fintech startup Lydia announces that it has raised a Series C funding round of $ 100 million. With this funding round, the startup has achieved a unicorn valuation, which means it is currently valued at over $ 1 billion.

Dragoneer and Echo Street are investing in the startup for the first time, and many of Lydia’s existing investors are putting more money on the table, like Tencent, Accel and Founders Future.

“What’s really impressive about this round is that it’s mostly funded by existing investors,” Cyril Chiche, Lydia co-founder and CEO, told me.

The times are changing. A few years ago, when a startup chose to raise funds from its existing investors, it usually meant that the team couldn’t find new investors. So existing investors would be willing to put more money into the business in exchange for a lower valuation.

But now a lot of venture capitalists have raised huge funds. Hedge funds are now investing in fundraising. Investing in the most competitive startups has become more difficult. If a holding company is doing well, venture capital firms now generally want to double their previous investment.

And Chiche confirmed that Lydia’s valuation has risen sharply from last year.

In the beginning, Lydia was a peer-to-peer payment app. After adding your debit card and bank details, you will be able to send and receive mobile payments with other Lydia users. It has gradually become the dominant mobile payment application in France.

Over the past few years, the app has evolved a lot into a financial super app with a wide range of financial features and products. Users can get a virtual or physical debit card that works on the Visa network. They can also manage their money more easily by creating sub-accounts which they can share with other Lydia users.

Image credits: Lydia

In addition to daily payments, Lydia also offers small loans of € 100 to € 3,000, savings accounts, and now trading. In particular, the new crypto and equity trading partnership with Bitpanda makes it much easier to invest small amounts of money whenever you want.

Lydia and Bitpanda offer fractional shares so that you can buy, for example, € 10 of Apple shares 24/7, something quite new for the French market. And given the success of trading in Robinhood and Cash App in the US, the new trading feature could represent a great opportunity for the future of the French startup.

By adding more products in addition to peer-to-peer payments, Lydia wants to boost engagement. The business model is pretty clear. When you send and receive a handful of payments with the app, it’s all free. If you want to take it a step further, the company offers premium memberships.

Lydia has attracted 5.5 million users so far. More importantly, a third of French people between the ages of 18 and 35 have a Lydia account. In other words, things are going well in France. And the startup now wants to take the same path in other European countries.

Lydia plans to hire 800 people over the next three years, including 160 people in 2022 alone. By 2025, the company expects 10 million customers in Europe will use Lydia as their primary account.

“What we are experiencing is the reinvention of the banking industry,” Cyril Chiche told me. According to him, people will not handle money the same way in a few years. Some companies will get it while others will not.

He does not think it is a duel between the neobanks and the incumbents. Some legacy players may have what it takes to stay relevant in the future. But, of course, he really denies that Lydia can simplify retail banking so that it becomes more accessible to more users.

Image credits: Lydia

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