FinTech News
FinTech Banking App Dave Going Public Via SPAC
Another FinTech is going public. Today, Dave announced that it would be merging with special purpose acquisition company (SPAC) VPC Impact Acquisition Holdings III, Inc. As a result, the startup will become a publicly traded company, with the listing going by the ticker symbol $DAVE. The transaction values Dave at approximately $4 billion and will put $375 million in cash on the combined company’s balance sheet.
Since debuting in 2017, Dave has amassed a reported 10 million customers while also earning investments from Mark Cuban, Norwest Venture Partners, The Kraft Group, and others. In addition to banking features that have become standard among FinTech offerings, Dave’s platform also includes the ability for members to receive small advances on their paycheck with no fees, add rent payments to their credit reports, and more. Notably, Dave estimates that their ExtraCash advance feature has saved customers nearly $1 billion in overdraft fees, while their Side Hustle directory has reportedly helped users earn an additional $200 million in income.
In a press release announcing the news, Dave CEO Jason Wilk spoke to the company’s mission, stating, “At Dave, we’re committed to improving the financial health of our members. We believe the legacy financial system has failed to deliver and today, more than 150 million people need our help to build financial stability.” Wilk went on to say, “Dave is upending the banking industry with our suite of breakthrough financial products and making a meaningful impact on our customers’ lives. This transaction and continued support from our longstanding investors signify confidence in our strategy, vision, and the significant growth opportunities ahead.”
Meanwhile, VPCC co-CEO Brendan Carroll said of the startup, “Dave’s growth and expansion over the last few years have been significant and we believe that the company has only scratched the surface of what it can achieve. With its strong management team, differentiated product suite, and immense brand affinity, we believe Dave is well-positioned to achieve future growth and continue to disrupt the legacy financial system.”
Dave’s announcement comes shortly after another FinTech saw a successful SPAC IPO. Last week, SoFi went public, hitting the Nasdaq under the ticker symbol $SOFI. The stock managed to close up 12% in its initial trading day, but has seen some ups and downs since. In SoFi’s case, the IPO was made possible by a merger with Social Capital Hedosophia Holdings Corp. V in a transaction that earned the FinTech approximately $2.4 billion.
Clearly it didn’t take long for the FinTech SPAC train to continue rolling. With Dave now on its way to the stock market, it seems as though we’re primed to see several other challengers banks and the like following this path as well. Of course, given the exploding SPAC market, it seems it may only be a matter of time before this IPO method draws greater scrutiny. In the meantime, we’ll have to wait and see how Dave and other public FinTechs perform on the market.
