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Tech

Lydia, the French payment application with 8 million users, launches the Sumeria mobile banking application

If you live in the United States, you probably use apps like Venmo and Cash App to pay back your friends or split bills with your roommates. Lydia is a French startup that has also transformed payments into a mobile consumer application and service.

Today, after reaching 8 million users, the company finds itself in an interesting position. Does it want to add more financial services to increase its average revenue per user? Or does it want to simplify its app to ensure as many people as possible use Lydia to send and receive money from their phone?

The company essentially decided it didn’t want to choose one option over another. This is why Lydia is launching a challenger bank, Sumeria, and splitting into two applications: Lydia for peer-to-peer payments and Sumeria for people looking for a mobile-first bank account.

“We are proud to announce the launch of our European banking project, Sumeria. It’s the same company, Lydia Solutions, which is launching a banking project,” Lydia co-founder and CEO Antoine Porte told TechCrunch.

The decision makes sense if you’ve been using Lydia for more than a few years. After raising 235 million euros ($255 million at current exchange rates) and focusing on growth, the company decided to refocus on monetization in late 2022 and 2023.

The result was mixed as Lydia grew and her application became more complicated. While most users used Lydia for quick mobile payments, the company kept telling its users that they could also use it as a bank account with a dedicated account number and a Visa debit card. The company also offers stock and cryptocurrency trading, small loans, savings accounts, cash back and much more.

Two million users are now using these advanced features, and some of them have even started paying a monthly subscription – the company says this part of the business is profitable. But in the process, Lydia inadvertently alienated some of its user base – it was no longer as easy to use as before.

This is why Lydia tries to clarify her offers. A few weeks ago, the company launched a second app, simply (and confusingly) called Lydia, dedicated to peer-to-peer payments. Existing Lydia users who simply want to send money with their phone and create pools should upgrade to this new app. Hopefully this is the last confusing decision.

As for Lydia’s original app, the company is completely changing its approach to mobile banking and launching Sumeria, a European challenger bank. It’s a new name and a new beginning.

This decision comes a few months after communications expert and influencer Anne Boistard collected complaints from former Lydia employees for her Instagram account, Balance Ton Agency.

The co-founder and president of Porte et Lydia, Cyril Chiche, admitted to making mistakes in the past. “Nothing new has been published. These are things that we had already dealt with internally,” Chiche said. Now, the company wants to move on and the new brand is part of this approach.

“We already had this (rebranding) idea in mind. It was already under construction. But all this of course helped us move on to something more serious. We were criticized for how we acted as a scrappy startup,” Porte said.

Image credits: Romain Dillet/TechCrunch

All banking functionality from Lydia has been transferred to Sumeria. Users have a bank account with a dedicated IBAN to receive money and make SEPA payments, as well as a debit card that they can control from their phone. The company believes it can create a better bank account than traditional banking institutions. This pitch is reminiscent of the previous wave of European and British challenger banks, such as N26, Monzo and Starling Bank.

“Banks work for their own interests before those of their customers. He’s not using technology effectively,” Chiche told TechCrunch. “Online banking is front-end software for processes and organizations that are clearly outdated and therefore very expensive to operate. »

Sumeria brings a new logo, new card designs, and a complete overhaul of the mobile app with a simpler main screen. You’ll see your card in a customizable digital wallet on the app’s home screen, your main account and balance at the top, and your most recent transactions at the bottom.

You can scroll down to see all your accounts or scroll up to dig a little deeper into your transaction history. There is no menu at the bottom of the screen to switch between tabs. Sumeria is also launching a web interface so you can view your balance and transactions without having to install the app or want to use a computer.

What’s different from other challenger banks is that Sumeria wants to simplify the way you manage your money. People will earn 2% on their cash balance (4% for the first three months) as long as they use their Sumeria card at least 15 times per month – your money does not need to be separated into a cash account. separate savings.

“We generate interest on all your accounts. You don’t have to put money in this or that account,” Porte said. “There are currently 500 billion euros of deposits that generate no interest on personal current accounts in France,” Chiche said.

Image credits: Lydie Solutions

Unlike Revolut, Sumeria will focus exclusively on the European market so that people living in France, Germany or Spain will feel like they are using a French, German or Spanish bank account. “Their vision was international and not European. The valuation required to raise that much money made them promise too much,” Porte said.

With the new name, the company hopes people will take Sumeria more seriously and consider using it as their primary bank account – that’s the other reason for the rebranding. This is also why the company will open a store this summer in Paris where people can interact with Sumeria experts.

It will be a kind of bank branch, but without the usual offices that can be found in bank branches. This will work more like the funky bar in Apple stores.

Lydia has set ambitious goals with Sumeria. The company plans to invest 100 million euros in its new venture and hire 400 people over the next three years. Sumeria wants to reach 5 million customers by 2027.

techcrunch

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