French fintech startup Lydia has prolonged its Collection B spherical. Accel is main the extension with all main current shareholders additionally taking part. Lydia first raised $45 million in January 2020 — Tencent led that funding. The startup is now elevating one other $86 million, which implies that Lydia has raised $131 million in complete as a part of its Collection B spherical.
Whereas Lydia wouldn’t focus on the valuation of the spherical, its co-founder and CEO gave me a touch. “The worth of the corporate has actually considerably elevated between the 2 components of the B spherical,” he informed me.
Jhawar joined funds firm Braintree in 2011 as COO and CFO. Shortly after, Braintree acquired peer-to-peer cost app Venmo. “Once we acquired Venmo it was solely 15 individuals. That they had simply launched their cell app in April of 2012,” Jhawar informed me in a telephone interview.
PayPal later acquired Braintree and Venmo — Jhawar caught round till early 2020 to scale Venmo to the large fintech shopper app that 52 million individuals use within the U.S. Jhawar believes that peer-to-peer funds characterize the start of a long-term shopper relationship.
“You already know that P2P is profitable after they go away cash of their account as a result of they’re going to return again,” he mentioned.
Again in 2014, when I first covered Lydia, I known as it the Venmo for France — they’d solely raised €600,000 again then. It looks like Jhawar agrees with that take. Since then, Lydia has grown quite a bit and has expanded past peer-to-peer funds in numerous methods.
With Lydia, you may ship cash to a different person in only a few seconds. You don’t must enter an account quantity in your banking app — so long as their telephone quantity, they’ll obtain your cost.
You probably have cash in your account, you may select to spend it immediately utilizing a Visa debit card. Lydia enables you to generate a digital card that works with Apple Pay and Google Pay — you too can order a plastic card.
Lydia additionally helps direct deposit as you get your personal IBAN within the app. You can too create cash pots and ship a hyperlink to different customers, view your bank accounts in Lydia, donate cash to hospitals and charities, get a credit line, and so on.
However there’s one killer function that stands out over the remainder. Financial institution accounts are typically monolithic and don’t replicate how you employ cash. “In case you take a look at banks at the moment, they name the primary account a checking account. It’s outdated by design,” CEO Cyril Chiche mentioned.
Lydia has created versatile sub-accounts that you should use in many alternative methods. You possibly can create a second sub-account and set some cash apart on your payments. You possibly can create a 3rd one and share it with a couple of mates since you’re occurring a trip collectively.
You possibly can transfer cash from one account to a different by swiping your finger throughout the account grid. As you may have a number of contributors and you may change the account related together with your debit card, it implies that cash flows extra naturally. It looks like utilizing a messaging app, not a monetary app.
And it’s been working effectively in France. The corporate now has greater than 4 million customers. Transactions have doubled over the previous yr, which implies that utilization is accelerating.
“Lydia has the most important P2P community in Europe exterior of PayPal and has the potential to develop all throughout Europe with a mobile-first, customer-focused resolution. This may carry demand for incremental shopper monetary merchandise and excessive service provider curiosity to just accept the cost,” Jhawar informed me in an e mail.
And 2020 has been a busy yr for Lydia. The corporate has simply launched a whole redesign to raised place the app as a brilliant app for monetary providers. All of the interactions and all the primary tabs have been modified.
Lydia additionally re-launched its premium providing with two new premium plans that give you greater limits over the free plan and an insurance coverage package deal for the most costly provide. These plans are extra in step with what the app provides at the moment and will contribute to the corporate’s backside line. “The following step is bringing Lydia to profitability and it’s one thing that has at all times been essential for us,” Chiche mentioned in a latest interview.
Behind the scenes, Lydia has additionally upgraded many core options, similar to migrating playing cards to a brand new infrastructure, including alerts to account aggregation, supporting prompt SEPA transfers to financial institution accounts, and so on.
In 2021, the corporate plans to construct on high of that new basis with extra monetary merchandise. “We’re going to attempt each single product — credit score, financial savings, funding,” Chiche mentioned.
The corporate can be slowly increasing to extra international locations. But it surely desires to supply a product that looks like a neighborhood product with a neighborhood card and a neighborhood IBAN to extend acceptance charges. Lydia is beginning with Portugal.