The first fintech to go public in the new year, the Dave challenger banking app went live on the Nasdaq Thursday, after a successful merger with a Victory Park SPAC.
With 10 million members and an estimated $1 billion saved in overdraft fees, the DAVE ticker started trading at $8.27/share, giving the neobank above a $4 billion valuation. It closed the day at $8.53, a gain of more than 3% on their first day.
Jason Wilk co-founded the Mark Cuban-backed project in 2017 to challenge traditional banking problems. Wilk took to LinkedIn to celebrate the launch.
“From offering the first bank account that builds credit to helping our members find more work with Side Hustle, Dave is just getting started on our journey to provide a superior banking experience for the everyday American,” Wilk said.
“The common theme across all of our products is enabling access to financial opportunity, giving everyone the ability to reach their personal financial goals no matter how big or small.”
Dave offered overdraft protection and created a gig-economy job board called Side Hustle, which the company said has helped its customers earn more than $200 million.
A good year for challenger banks
As part of the prospectus, the challenger bank released its 2021 performance, posting a third-quarter revenue of $158 million, up 30% from last year. In addition, transaction revenue grew an astounding 956% year-over-year.
In a release, Wilk said he was thrilled to partner and create a new board of directors to continue Dave’s goal of leveling the playing field.
“This new influx of capital will allow us to invest in our business and, in turn, help more people living paycheck to paycheck who traditional banking system has failed to support. We’re looking forward to hitting the ground running,” Wilk said.
The acquisition company, named VPC Impact Acquisition Holdings III, Inc, comes from a long line of SPAC firms founded in the past two years.
The shareholders of the SPAC approved the deal on Tuesday, Jan. 4, and the transaction included a $210 million PIPE led by Tiger Global Management.
‘First-class banking solution’
“We are pleased to complete the combination and look forward to working with Jason and the broader Dave team as they accelerate their growth and continue to disrupt the legacy financial system,” Brendan Carroll, Co-CEO of VPCC, said in a release.
“We believe that Dave has built a first-class banking solution with differentiated offerings that will continue to improve their customers’ financial lives.”
Attempting to capture the success of privately funded unicorn startups, SPAC funds raised in the US totaled a record of $162 billion in 2021, according to the SPAC Research Data website. That amount is nearly double the $83.4 billion raised in 2020.
Many SPACs came and went; the largest fintech launch was SoFi, which merged with a SPAC in June 2021 to go public. The super app raised more than $2 billion on the sale. But unlike private rounds, the public decides the stock price.
SoFi’s price has roller-coastered back and forth since its launch, showing at the very least that public companies have to survive on more than just hype.
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