Lydia: the itchy hair of classic banks

If France now has more than 25 unicorns, only one, Lydia, can claim to have given birth to an expression that has entered common language. Launched in 2013, the French fintech has become popular with the general public, and mainly with 18-35 year olds, with its peer-to-peer refund functionality. It is with this that the expression “I’ll make you a Lydia” has caught on among Millennials. But this was only the starting point of the company founded by Antoine Porte and Cyril Chiche.

Today, Lydia offers a plethora of services, such as mobile payment, remunerated savings, express loans, debit cards, online pots, a current account or even trading. Accessible free of charge, the application has included a paid offer since 2018 to allow users to obtain a Visa card, which replaces all other bank cards, and virtual cards for online payments, but also to benefit from several advantages (savings remunerated at 0.6%, pools without commission, payment facilities, etc.).

“Bankers find it difficult to question themselves”

To date, Lydia claims more than 5.5 million users, mainly in France, including 200,000 who have a card from the premium offer. If the company is losing money on refunds between friends, a free feature, it is banking on its diversification to monetize its offer. “Like a bank, a super-app or a supermarket, there are services on which you do not earn money, services on which you earn a little bit and services on which you earn a lot. We must make the service sustainable so as not to be easy prey for potential buyers who could too quickly put us out of the race or change our nature”, explains Antoine Porte, co-founder and CPO of Lydia.

But the nature of the company, is it that of a bank in the making or of a fintech? “We must remain modest, we are not going to replace the banks, but we can show them the way so that they question themselves and improve their services”, slice Antoine Porte. And to add: “For the next few decades, we want to be itchy hair in the shoes and underwear of bankers, who find it difficult to question themselves because they are sitting on a mountain of gold which spits out a little more money every year. ‘silver. They need fintechs, like us, Spendesk, Qonto and so many others, to come and force them to innovate.”

In France, Lydia is indeed one of the spearheads of the fintech ecosystem, which is doing very well. It is even one of the most prolific sectors of French Tech with 2.5 billion euros captured out of the 11.6 billion euros raised by French start-ups in 2021, according to the EY barometer of the venture capital in France. Lydia contributed to this good performance since the company, which counts the Chinese giant Tencent and the American fund Accel among its investors, raised 103 million dollars last December. An operation that has enabled the company to become a unicorn and to project itself into the future with the ambition of becoming the main current account for 10 million Europeans by 2025.

A financial “super-app”, but not beyond

Claiming for years his intention to become “the PayPal of the new mobile generation”, Lydia today prefers to use the term “super-app”, popularized by WeChat in China. But unlike Revolut, which announced last year the launch of Stays, a tourist accommodation booking platform, the French fintech does not intend to leave the financial sphere to compete with the British neobank, whose valuation is is worth $33 billion, or other players like N26, valued at $9 billion.

“We don’t prevent anything, but there is still a limit. We’re not going to go sightseeing, that’s going too far and that’s going to complicate the interface. On the contrary, we will try to simplify it to be able to tell our users that we are an everyday interface for their money”, explains Antoine Porte. The French entrepreneur prefers to focus on the international expansion of his business. “Lydia has a European vision. There is a gigantic place to take in Germany, Italy, Spain, Portugal or even Ireland, despite Revolut and N26. There is a considerable market that is still in its infancy”, he believes.