Fintech Startup Lydia Raises $100M More, Becomes Unicorn
After a C series round worth $100 million, the French fintech startup earned a $1 billion valuation and unicorn status. The startup is planning on putting the funds towards hiring new people and expanding into other European countries.
The team behind the super finance app plans to hire 160 people in the upcoming year and about 800 people throughout the next three years. The company hopes that by 2025, it will have 10 million people in Europe using Lydia as their primary financial account.
What started as a peer-to-peer payment platform is now the preferred mobile payment app for a third of young French people, and offers much more than it did in its humble beginning. Users can get a virtual debit card accepted anywhere Visa is, and sub-accounts that can be shared with other app users. People can also rely on Lydia for small loans ranging from €100 to €3,000, as well as savings accounts.
It has recently introduced stock and crypto trading in partnership with Bitpanda. You can now buy fractional shares, which is entirely new for the French market. Considering the success of similar trading apps in the US, this could turn out to be the startup’s most lucrative move yet.
“What we’re experiencing is the reinvention of the banking industry,” Cyril Chiche, co-founder and CEO of Lydia, said. According to Chiche, money management is changing with the times, and financial and banking companies need to change along with it. By adding more features on top of the original ones, Lydia managed to gain a significant user base, and that growth is likely to continue.
Lydia’s series C round indicates a change in how startups raise funds. Lydia earned the unicorn status mainly with the help of existing investors putting more money into the app - namely Tencent, Accel, and Founders Future. The two new investors were Dragoneer and Echo Street.
“What’s really impressive with this round is that it is primarily financed by existing investors,” Chiche says.
Previously, more money on the table from the same investors meant one thing - the team couldn’t find new investors. It would also mean that the company is lowering its valuation for existing investors.
However, these days, investing in the most competitive startups as a new investor is more complex than before. Existing investors will typically double down if a company is doing well - and Lydia is doing more than well. Its valuation and number of users, which have skyrocketed since the last round, tell us as much.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.
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