Why doesn’t Europe have a financial super app?
“Two more years.”
It’s all the time Cyril Chicheco-founder and CEO of the French FinTech unicorn lydiabelieves that France will have to be neck and neck with the United Kingdom or Ireland, currently the main destinations for financing start-ups in Europe.
And there is data to support this possible outcome. According to recent data from Pitchbook, venture capital (VC) investments in French startups have doubled over the past year, from €5.1 billion to over €11 billion (12, $5 billion) in 2021. And while that figure lags behind the £26 billion ($35 billion) the UK tech sector raised last year, the rapid acceleration in startup funding in France is undeniable.
Read more: Venture capital investment in French startups doubles in 2021 to $11.3 billion despite regional funding gap
Barely a month into the new year, five new unicorns have been minted in France so far, bringing the country to the target of 25 unicorns it aimed to reach by 2025 with three years in advance.
“If you look at it from a global point of view, there are only 1,000 unicorns in the world, so the fact that France was able to get [several] over the past few months is even more spectacular and proves that as an ecosystem, France is definitely on the world map now,” Chiche told PYMNTS in an interview.
For Chiche, one of the key drivers of this funding growth is the growing number of globally competitive scale-ups in France with a proven ability to build innovative solutions that puts them on par with Israeli, Asian and or Silicon Valley.
He also highlighted the efforts of recent governments that have invested heavily and created the conditions for “wise investment” in start-up companies and also facilitate the hiring of international talent with initiatives such as special visas.
Related: French super app Lydia raises $100m, worth $1bn
As one of the biggest success stories to emerge from France, Lydia has certainly benefited from these efforts, reaching unicorn status last month after raising $100 million in a Series C round and raising its funding. total to more than $260 million.
Founded in 2013, Lydia started out as a peer-to-peer (P2P) payment app like Venmo and has since become the second most downloaded FinTech app in France, enabling its 5.7 million customers, most of whom are in the 18 to 35 age group, access to other offerings such as savings accounts, loans, insurance, and more recently cryptocurrency trading.
“We believe that by adding all of these features and adding innovation with Lydia’s specific DNA of bringing a human side to banking, we now have what it takes to bring people to [accept that] we are a good alternative to traditional banking,” he noted.
From the platform to the main account
The company’s plan is now to reach 10 million European customers using Lydia as their primary account by 2025. as a primary account is a big step and will require raising the bar. in terms of the trust people have to place in their solution.
But they have worked to build that trust over the past nine years, he said, consistently demonstrating they have the technological capability to improve the delivery of traditional banking services beyond the peer-to-peer payment service. -peer (P2P) that Lydia launched. with at launch.
And reaching that customer milestone is part of a broader strategy to become a financial “super app” for millennials and Gen Z customers in Europe, like China’s WeChat and UK fintech Revolut.
Chiche said that instead of spending the next decade refining the product and expanding into new geographies after achieving its original goal of enabling consumers to make payments on their phone, they instead opted to aiming higher, supported by a favorable regulatory environment, the adoption of an open banking system and in particular the strong consumer demand for a service that online banks and traditional banks did not provide.
He compared today’s traditional banks and their online interfaces to online stores where people can buy CDs, a simple improvement over shopping in a physical store that proves that not much has changed over the years. last decades.
“Honestly, what you want is Spotify. You want to be able to listen to any music from any artist’s album anywhere in the world anytime in a cab or on the train or anywhere, and all from your mobile,” Chiche explained.
He added that the ongoing mobile internet revolution has shifted society from ownership of physical assets to digital access to assets, placing the traditional banking offering well below the expectations of today’s users.
“What they [consumers] want is something that’s on par with Spotify and Airbnb and all those big category-defining companies in other industries and banks. We don’t have that for the banks, and we need one and we actually want several,” he said. And with Lydia aiming to kick off this super app trend, it’s likely more will follow soon.