Mark Cuban-backed banking app Dave going public via $4 billion SPAC

Banking app Dave launched Monday that the company will net its market debut by a SPAC merger with VPC Impact Acquisition Holdings III.

The agreement values Dave at $4 billion and is expected to shut in the 2d half of of this one year. Upon completion of the deal, it intends to list on the Fresh York Stock Substitute below ticker image DAVE.

The corporate, ranked No. 26 on closing one year’s CNBC Disruptor 50 list, changed into most objective no longer too long previously valued at $1 billion in August 2019, in step with PitchBook files.

Victory Park Capital, a worldwide investment firm headquartered in Chicago, has a protracted be conscious sage of debt and equity financing transactions in fintech, and has been a longstanding investor in Dave, most objective no longer too long previously providing a $100 million credit facility to the company in January 2021. VPCC done its initial public offering in March 2021.

Dave — shorthand for the hero in the David vs. Goliath story — is designed to to find rid of many of the aspects customers can not stand about legacy banks. The corporate began with overdraft fees. For a $1-per-month membership fee, users can entry checking accounts with out a fees and as a lot as $100 in overdraft safety with out fees or pastime. Participants who join enlighten deposit additionally to find automatic budgeting and the skill to amass their credit rankings by the reporting of rent and utility funds to credit bureaus.

The corporate says it has helped its customers steer sure of nearly $1 billion in overdraft fees by its ExtraCash characteristic, and helped gig workers make extra than $200 million from their facet hustles by its sharing-economic system job board, Side Hustle.

Co-founder and CEO Jason Wilk, who founded three other initiating-americaand counts Sign Cuban as an early investor, believes patrons can also serene to find credit for doing the correct ingredient consistently.

“At Dave, we’re dedicated to bettering the financial smartly being of our participants,” Wilk said in a observation announcing the deal. “We imagine the legacy financial machine has failed to tell and as of late, extra than 150 million people need our support to assemble financial steadiness.”

The deal entails a $210 million non-public placement led by Tiger Global Management. So-called PIPE financing is a mechanism for corporations to raise capital from a preserve shut neighborhood of investors that net the closing market debut that you simply would possibly well well doubtless also imagine. Wellington Management and Corbin Capital Companions are additionally taking part.

SPACs have come to market at a breakneck race over the past one year as an different to IPOs. However, the market has cooled no longer too long previously amid regulatory considerations and an overall pullback in SPAC shares. The CNBC SPAC 50 Index, which tracks the 50 largest U.S.-basically based mostly premerger blank-test deals by market cap, has slumped roughly 4% one year to this level, while the Nasdaq has gained roughly 7%.

To this level this one year, 330 SPACs have raised nearly $105 billion, in step with SPAC Evaluate, however consultants caution investors that the contemporary frenzy, and subsequent dawdle in SPAC shares, can also lead to riskier deals in the upcoming months.

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