French mobile payments firm Lydia has extended its Series B investment round, raising an additional $86 million in capital led by Accel.
Lydia’s total Series B funding currently stands at €131 million, which reportedly makes it the largest round ever closed by a French Fintech company. Previous investors in Lydia include Chinese digital commerce giant Tencent, New Alpha, and Open CNP.
Founded in 2013, the Lydia peer to peer (P2P) payments platform claims more than 4 million users and a 25% or a quarter of the market share among French Millennials. Like its US counterpart Venmo, the brand has entered the French lexicon as a verb.
Lydia’s management confirmed that the Fintech firm has diversified its operations. It now allows users to get new accounts, payment cards, loans, insurance and gift cards. Some of these new products and services are developed internally by the Lydia team, while the others are offered by third-parties through a marketplace.
Cyril Chiche, CEO at Lydia, stated that the company will use the funds raised to expand its operations into new markets, which will come after the Fintech launched offices in Portugal earlier this year.
Amit Jahwar, the former GM of Venmo and Accel Venture partner, has led the recent investment for Accel and has taken a seat on Lydia’s board.
Chiche remarked:
“This investment will not only enable us to respond to our customers’ needs faster and move into new markets, but also benefit from Amit’s experience building Venmo. I believe Lydia now has what it takes to become Europe’s leading financial super-app.”
As reported in October 2020, Lydia teamed up with Tink in order to enable Open Banking connectivity. Lydia’s mobile payment app will be using Tink’s open banking tech to access PSD2 APIs across Europe.
In January of this year, Lydia had secured $44.6 million in funding from Tencent, Open CNP, XAnge, and New Alpha.
Chiche had stated (in January 2020):
“We are now in a position to challenge the traditional retail banking distribution model with a mobile platform model similar to what we see in sectors like retail, music or travel.”
Lydia accounts can be connected to users’ regular bank accounts and their debit card. This allows users to easily send funds from their Lydia accounts to the bank account of their choice. This strategy aims to encourage people to spend money directly from their Lydia accounts and make use of the company’s native payment features, with users’ regular bank accounts serving mainly as a money back end.
Unlike many other Fintech solution providers, Lydia does not aim to replace traditional banking institutions. The firm’s management notes that it is planning to launch a meta-banking app. Peer-to-peer payments are becoming increasingly popular and a better user acquisition strategy should be put in place, the Lydia team says.