The French fintech startup Lydia announce a round of Serie C of 100 million dollars and with this round it reaches the unicorn valuation, that is, of more than one billion dollars.
Dragoneer and Echo Street are investing for the first time, along with existing investors from Lydia such as Tencent, Accel and Founders Future.
“The really impressive thing about this round is that it is mainly funded by existing investors,” said the co-founder and CEO of Lydia, Cyril Chiche.
The times they Are a 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. Existing investors would therefore agree to put more money into the company in exchange for a lower valuation.
But now, many venture capital firms have raised huge funds. hedge funds now are investing in rounds of risk. Investing in the most competitive startups has become more difficult. If a company is doing well, venture capital firms now often want to double their previous investment.
And Chiche confirmed that the valuation of Lydia has increased considerably compared to last year's round.
At first, Lydia it was a person-to-person payment application. After adding debit card and bank details, user can send and receive mobile payments with others from Lydia. It progressively became the dominant mobile payment app in France.
In recent years, the app has evolved quite a bit to become a super financial 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 subaccounts that they can share with other users of Lydia.
Image credits: Lydia
In addition to daily payments, Lydia It also offers small loans from 100 to 3.000 euros, savings accounts and now trading operations. In particular, the new stock and cryptocurrency trading partnership with Bitpanda makes it much easier to invest small amounts of money when the client wants it.
Lydia y Bitpanda they offer fractional shares to be able to buy, for example, €10 of Apple shares 24 hours a day, 7 days a week; it is something quite new for the French market. And given the success of Robinhood y Cash App In the United States, the new trading function could represent a great opportunity for the future of the French startup.
By adding more products in addition to person-to-person payments, Lydia wants to boost the degree of customer loyalty. The business model is quite clear. When you send and receive multiple payments with the app, it's all free. If you want to go further, the company offers premium subscriptions.
Lydia it has so far attracted 5,5 million customers. Even more relevant is that a third of French people between the ages of 18 and 35 have a bank account. Lydia. In other words, things are going well in France. And the startup now wants to follow the same path in other European countries.
Lydia plans to hire 800 people in the next three years, including 160 people in 2022 alone. By 2025, the company expects 10 million customers in Europe to use Lydia as your main account.
“What we are experiencing is the reinvention of the banking industry,” Cyril Chiche told me. According to him, people will not manage money in the same way in the coming years. Some companies will get it while others won't change.
He doesn't think it's a duel between neobanks and traditional banks. Some of these traditional banks may offer what it takes for certain customers to remain relevant in the future.
Despite its manifestations, Lydia simplifies retail banking to make it more accessible to more people. This is a key competitive advantage in today's market given the new digital habits of customers.
