Mark Dave, the Cuban-backed banking app, goes public through $ 4 billion from SPAC

Banking app Dave announced on Monday that the company will make its market debut through a merger of SPAC with VPC Impact Acquisition Holdings III.

The deal values ​​Dave at $ 4 billion and is expected to close in the second half of this year. Upon completion of the deal, you intend to trade under the ticker symbol DAVE. A SPAC merger typically results in the target company merging with itself and the listing status remains unchanged. VPCC is listed on the NYSE. Target companies can choose to change the exchange on which they are listed. Dave has not yet formally indicated the exchange he plans to list on.

The company, ranked No. 26 on last year’s CNBC Disruptor 50 list, was most recently valued at $ 1 billion in August 2019, according to data from PitchBook.

Victory Park Capital, a Chicago-based global investment firm, has a long history of debt and equity financing transactions in fintech, and has been a long-time investor in Dave, who recently provided a $ 100 line of credit. million to the company in January 2021. VPCC completed its initial public offering in March 2021.

Dave, short for the hero in the David vs. Goliath story, is designed to remove many of the features that customers can’t bear about legacy banks. The company started with overdraft fees. For a membership fee of $ 1 per month, users can access checking accounts with no fees and up to $ 100 in overdraft protection with no fees or interest. Members who sign up for direct deposit also get an automated budget and the ability to increase their credit scores by reporting rent and utility payments to credit bureaus.

The company says it has helped its clients avoid nearly $ 1 billion in overdraft fees through its ExtraCash feature, and helped workers earn more than $ 200 million from their side activities through its job board. Sharing Economy, Side Hustle.

Co-founder and CEO Jason Wilk, who founded three other startups and counts Mark Cuban as an early investor, believes consumers should be given credit for consistently doing the right thing.

“At Dave, we are committed to improving the financial health of our members,” Wilk said in a statement announcing the agreement. “We believe that the legacy financial system has not worked and, today, more than 150 million people need our help to build financial stability.”

The deal includes a $ 210 million private placement led by Tiger Global Management. The so-called PIPE financing is a mechanism for companies to obtain capital from a select group of investors who make the final debut in the market possible. Wellington Management and Corbin Capital Partners also participate.

SPACs have come onto the market at a breakneck pace over the past year as an alternative to IPOs. However, the market has cooled down lately amid regulatory concerns and a general pullback in SPAC shares. The CNBC SPAC 50 Index, which tracks the 50 largest pre-merger blank check offerings by market capitalization, has plunged about 4% so far this year, while the Nasdaq has gained about 7%.

So far this year, 330 SPACs have raised nearly $ 105 billion, according to SPAC Research, but experts are warning investors that the recent frenzy and subsequent fall in SPAC shares could lead to riskier deals in the next few months.

Correction: Dave has not yet formally indicated the exchange he plans to list on.

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