Interview with Lydia – on the quest to become the European super-app

The Paypers sat down with Cyril Chiche, CEO of Lydia, to discuss the company`s goal to become the financial hub for its users, a super-app that empowers users to control their money, on their terms

Lydia was founded in December 2011, with a vision to provide a mobile app where one can do all their payments from a single place. It started as a peer-to-peer (P2P) payment app, initially targeting college campuses, and then further extending to retail chains and ecommerce businesses.  

At first, we rolled out two capabilities: the P2P service and a QR code-based payment designed to pay a small business or independent professionals, which has been made available the first version of the app released in July 2013. 

In 2016, we decided to go to a next level and upgrade our services beyond money transfers, to enable our users to instantly spend that money, therefore, we launched a card so that one can spend their Lydia balance with every retailer that accepts Mastercard. 

Moreover, we came up with the idea that we should make one interface where users can easily create money pockets for different financial purposes (one for salary, one for taxes, for example) while also see their balances from different bank accounts. 

Around this innovative current account we’ve built, we’re now adding credit, insurance, donation to charities, and all kind of additional services in a marketplace today, all of them are using the same attention to user experience and complying with what is expected from an app like Lydia.

Could you please elaborate on the number of potential users of the app in France and the number of current users? Who are the most active users (profile, segments)?

Lydia has been largely adopted by the youngest part of the adult population, so 18- to 24-year-olds were by far the largest part of the userbase and the most active one, until a few years ago. As we started to grow, we kept on having a lot of these users, but older people have also started to use Lydia for more current account and marketplace usage.

Currently, the largest part of our userbase consists of people between 25 and 30 years old, and the fastest growing userbase is between 30 to 35 years old. If we look at the people between 18 and 30 in France, we have about 10 million users, and 35% of them would have a Lydia account.

The COVID-19 pandemic has affected all sectors of the world economy and society. What was/is the impact on Lydia`s growth, revenues, and profitability? How would you describe the company’s business model and what are your target and objectives for 2021?

We didn’t see a significant change during lockdowns at the beginning of the pandemic, but we witnessed an exponential growth and bounce back in the following months. In June 2020, for instance, our transactions reached all time high by 30% (when the country re-opened), and overall, last year, people transacted on Lydia twice as much as they did in 2019.

In 2020 we also increased the userbase by 50% - we grew massively from 2.9 to 4.4 million users, and people got more engaged, which is also the result of this great shift towards contactless payments and less cash usage. 

We still have strong objectives in 2021 in terms of doubling the number of transactions and increasing the userbase, despite the uncertainties that we have in front of us.

In October 2020, Lydia selected Tink as its Open Banking technology partner. What was the thinking behind this move and what benefits and opportunities do you expect to draw from this partnership? 

Being able to connect and move money from bank accounts through the Lydia interface is key to us. Also, we believe it is crucial to offer this service in a similar way in all the countries where we operate. 

Our vision is to become a financial super app that lets users control their bank accounts and access various financial services. In France, we have a partner that we work with in this sense, however, we also needed a partner to collaborate with at European scale in order for us to enter new countries and connect to new banks.

Tink’s API covers key European markets, which is going to be important in our European expansion outside France. The company provides a single API that manages all the complexities of the information systems of European banks.

Hopefully, when the pandemic is less impactful, we’ll be able to expand into more markets. We’ve just started our international expansion with an office in Portugal and we expect to expand into least two new countries in 2021, (specifically Belgium and Spain), and eventually a third one (Germany or Italy).

We want to offer a smart product with features that cand adapt to any local environment – the same product in every country that can be turned into a local payment service.  Our goal is to offer a product that feels the same in every country while having a local touch to it. When a person opens the Lydia interface in Portugal, they should see the Portuguese banks. If German or Italian banks appear that is of no use for the consumer. Same with the card. When using a Lydia card in Portugal, one needs a Portuguese card. That means it should feel equally domestic for merchants and able to communicate in Portuguese when placed in a card terminal or ATM. 

In December 2020, Lydia announced the extension of its Series B with USD 86 million funding led by Accel. How does this investment influence your development plans and what purpose you see for it? 

Our goal is to become the financial hub for the users, a super app that empowers users to control their money. In this sense, Lydia has laid a great foundation on which we continue to build, and we’re honoured to partner with Accel on this mission and global expansion.

The new investment would go towards expanding the app beyond France. Lydia will now be supported in its international endeavours by Accel partner Amit Jhawar (former general manager at Venmo), who is joining its board and will bring now his experience of the mobile payments space to Lydia.

The “super-app” concept has been gaining popularity across the world. What makes Europe a good market for supper apps? What makes Lydia a European super-app? 

In my opinion, if you look at Europe, there are no (dominant) super apps yet. We`ll get there, but it`s going to take some time and hard work.

It is not about Europe being a good market for super-apps. The business model is very much the same everywhere, it is globally duplicatable. The super apps have a highly popular and highly used core service, a hub for connecting services.  It’s the same philosophy everywhere across the globe: It is one-stop shopping, a combination of different services in a single app.

The concept of supper app is not new, it is just the mobile implementation of it that is called super app. If you think about the banking business (eg old-school bank branches) they are already doing that, meaning they have core services that people are highly engaged with and they’re selling cross-sign use services that are either built in-house or built together with third parties.

About Cyril Chiche 

Cyril Chiche is the CEO and cofounder of Lydia. With Antoine Porte, he launched Lydia in 2013, after spending 2 years to test and refine a mobile payment solution called drinkon.me. He is originally from Marseille, France, and has had prior experience as SVP Marketing & Strategy development in an French-American VC backed B2B venture, as well as founder and COO of a B2B software editor. He is also well involved in the Paris Fintech scene, notably as a member of France Fintech board.

About Lydia

Lydia is a France-based mobile financial services super app, with over 4 million users and a 30% market share among French millennials, who use its brand as a verb. Co-founded by Antoine Porte and Cyril Chiche, Lydia launched in 2013. It is the most successful French B2C fintech having raised over EUR 135 million in funding from investors such as Accel, Tencent, XAnge, New Alpha, CNP Assurances, Oddo BHF and Groupe Duval.