The French financial technology company, Lydia, has successfully broadened its Series B funding round. Accel is spearheading this extension, with substantial participation from all current major investors. Lydia initially secured $45 million in January 2020, an investment led by Tencent. The company is currently securing an additional $86 million, bringing the total raised in this Series B round to $131 million.

While Lydia has not disclosed the specific valuation of this funding round, co-founder and CEO Cyril Chiche indicated a significant increase in the company’s worth between the initial and subsequent portions of the Series B round.

Notably, Amit Jhawar is leading this investment on behalf of Accel. He recently joined Accel as a venture partner in July and will also be joining Lydia’s board of directors.

Jhawar previously served as COO and CFO at the payments company Braintree in 2011, which later acquired the peer-to-peer payment application Venmo. “When we acquired Venmo, the team consisted of only 15 individuals, and they had just launched their mobile app in April 2012,” Jhawar shared during a conversation.

Subsequently, PayPal acquired both Braintree and Venmo. Jhawar remained with the companies until early 2020, overseeing the expansion of Venmo into the prominent fintech consumer application utilized by 52 million people across the United States. Jhawar posits that peer-to-peer payments mark the beginning of a sustained relationship with consumers.

He explained, “A successful P2P system is demonstrated when users retain funds within their account, anticipating future use.”

When I initially reported on Lydia in 2014, I likened it to the Venmo of France – at that time, they had only raised €600,000. Jhawar appears to concur with this assessment. Since then, Lydia has experienced considerable growth and broadened its services beyond simple peer-to-peer payments.

Lydia enables users to transfer funds to others in a matter of seconds. Unlike traditional banking apps requiring account numbers, Lydia only necessitates the recipient’s phone number for payment.

Funds held within a Lydia account can be accessed for direct spending through a Visa debit card. The platform also allows for the creation of virtual cards compatible with Apple Pay and Google Pay, alongside the option to order a physical card.

Lydia also facilitates direct deposit through the provision of an IBAN within the app. Users can establish dedicated savings “pots,” share payment links, consolidate views of their bank accounts, contribute to charitable organizations, access credit lines, and more.

However, a particularly compelling feature distinguishes Lydia from conventional banking institutions. Traditional bank accounts often lack the flexibility to mirror users’ spending habits. “Current banking systems typically categorize the primary account as a checking account, a design that is fundamentally outdated,” stated CEO Cyril Chiche.

Lydia has developed adaptable sub-accounts for diverse purposes. Users can allocate funds to a separate sub-account for bill payments or create a shared account with friends for a group trip.

Funds can be seamlessly transferred between accounts with a simple swipe. The ability to have multiple contributors and associate the debit card with different accounts promotes a more fluid flow of money, resembling the experience of a messaging application rather than a traditional financial service.

This approach has proven successful in France, where Lydia now boasts over 4 million users. Transaction volumes have doubled in the past year, indicating accelerating adoption.

“Lydia possesses the largest P2P network in Europe outside of PayPal and has the potential for expansion throughout Europe with its mobile-first, customer-centric approach. This will generate demand for additional consumer financial products and attract significant merchant interest in accepting the payment method,” Jhawar noted in an email.

2020 was a significant year for Lydia, marked by a complete redesign of the app to position it as a comprehensive “super app” for financial services. All interactions and primary navigation elements were updated.

Lydia also relaunched its premium service with two new tiers, offering increased limits compared to the free plan and an insurance package with the more expensive option. These plans align with the app’s current capabilities and are expected to contribute to the company’s financial performance. “Our next objective is to achieve profitability, which has consistently been a priority for us,” Chiche stated in a recent interview.

Internally, Lydia has also upgraded core features, including migrating card processing to a new infrastructure, adding alerts to account aggregation, and enabling instant SEPA transfers to bank accounts.

Looking ahead to 2021, the company intends to build upon this foundation with a wider range of financial products. “We plan to explore every possible product – credit, savings, and investment options,” Chiche said.

The company is also gradually expanding its reach to new countries, prioritizing a localized experience with local cards and IBANs to maximize acceptance rates. Lydia is beginning this expansion in Portugal.