Now that the challenger bank Dave’s merger with a special-purpose acquisition company merger has been completed, the company plans to focus its attention more squarely on banking and cryptocurrency services.
CEO Jason Wilk said in an interview that Dave — which was poised to raise as much as $3.8 billion in a public offering Thursday — will develop cryptocurrency-related services over the next 12 to 24 months with the digital asset exchange FTX, whose Alameda Research arm was one of the investors in the SPAC.
Dave will make banking products the primary feature of its mobile app, including a new savings account that lets people save jointly for goals and cash-back rewards, Wilk said.
The Los Angeles-based Dave merged with a blank-check company sponsored by Victory Park Capital, VPC Impact Acquisition Holdings, on Thursday. Dave is now publicly traded on the Nasdaq exchange and valued at $4 billion. It was set to offer 376 million shares at $10 per share, according to a
Dave, which launched in 2017, was one of the first neobanks to offer an alternative to overdraft fees. It offers members small loans called ExtraCash they can use when their bank accounts run low. It also provides insights that tell them when bills are coming up.
It has been growing quickly and becoming a more formidable competitor to traditional banks. It currently has more than 11 million users,
Exactly what types of cryptocurrency services the company will offer has not been decided.
“There are so many avenues of crypto that are really exciting to the business,” Wilk said. “We’re working with Sam" — Sam Bankman-Fried, FTX's chief executive — "and FTX quite closely on what opportunities could look like for us in the future. We have not settled on anything as of yet.”
Wilk met Bankman-Fried through his friend, mentor,
On the banking side, Dave’s plans are clear.
It already offers savings and checking accounts through its partner Evolve Bank & Trust, a $712 million-asset institution in Memphis, Tennessee, but members can instead link external accounts to the app.
“Every customer, new and old, will be getting a free Dave checking account,” Wilk said. “So we can drive a lot more activity on the bank product for all of our customers and give them a way out of predatory overdrafts for good.”
Dave recently rolled out a beta version of a credit building feature: If users pay their rent and utility bills through a Dave account, the company sends that information to the three major credit bureaus. The company will fully launch this in the first quarter.
“Just paying your cellphone bill on time could improve your credit score by as much as 50 points,” Wilk said. “That can help hopefully graduate our members into other financial products.”
In February, Dave plans to launch cash-back rewards. This is expected to help drive adoption of Dave’s own checking account and debit card.
“We find the hardest thing is just getting people to make that first transaction and activate their card,” Wilk said. “So if someone has another reason to do that with cash-back rewards, we think that would be great for a customer who typically has not had access to great cash back in the past.”
Dave also plans to introduce this year a savings account called Goals that customers can use to save for themselves, but also to save with friends or family for specific events. They can ask for help from others if they’re having trouble hitting their savings goals.
“It’s almost like a social savings account,” Wilk said.
The company makes a large part of its revenue from interchange fees it collects each time a customer uses a Dave debit card. It also makes money from Side Hustle, its service that helps people find part-time work, which has been popular during the pandemic. Dave gets referral fees from the 30 companies that list jobs on the site, which include Uber, Lyft and Instacart.
Dave charges a dollar a month for its Insights. Customers can use ExtraCash for free, but they can leave Dave a tip. Tips go toward helping the company and toward pledging meals to Feeding America, Wilk said. Dave also makes money when a customer wants to have an advance sent to an external debit card.
Investors in the private investment round in the SPAC included Tiger Global, which invested $150 million, Victory Park, which put in $30 million, Wellington Management, Corbin Capital Partners, Norwest, Section 32, Capital One, the Kraft Group, SV Angel, the Chernin Group and FTX’s Alameda Research.
