Mark Cuban-Backed Banking App Dave Gets SPAC Deal: What Investors Should Know

A banking app with 10 million customers announced a SPAC deal Monday.

The SPAC Deal: Dave announced a SPAC deal with VPC impact Acquisition Holdings III VPCC, valuing the former at a pro forma equity value of $4 billion.

A PIPE of $210 million was led by Tiger Global Management, Wellington Management and Corbin Capital.

Dave has been previous backed by key investors that include Mark Cuban, Capital One Financial COF, SV Angel and The Chernin Group. Cuban serves on the company’s Board of Directors.

Current VPC Impact Acquisition Holdings III shareholders will own 6% of the new company.

About Dave: With a mission to create financial opportunity that advances America’s collection potential, Dave seeks to transform the traditional banking market. The company's name comes from the biblical story of David versus Goliath, comparing its customers to the goliaths of the traditional banking sector. 

Dave helps over 10 million customers with products that include banking, financial insights, building credit and finding side gigs in the gig economy. The company offers access to paychecks up to two days early for its customers.

In 2017, Dave was launched to help Americans avoid overdraft fees charged by traditional banks. Since 2017, the company has helped its members avoid around $1 billion in overdraft fees through its ExtraCash feature.

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Growth Ahead: Dave has launched new products to help grow its user base and revenue. The company introduced Dave Banking in December 2020.

Dave Banking offers a spending account and debit card with no monthly fees. Over 1.3 million Dave members have signed up for Dave Banking already.

“This transaction and continued support from our longstanding investors signify confidence in our strategy, vision and the significant growth opportunities ahead,” said Dave CEO Jason Wilk.

The company said it's positioned well to capture additional users in a market of over 150 million people that are underserved by the traditional banking system.

Financials: Dave had revenue of $122 million in fiscal 2020, year-over-year growth of 60%.

The company sees average revenue per user growing with additional penetration of the newly introduced Dave bank platform.

Dave forecasts revenue of $193 million in fiscal 2021 and $377 million in fiscal 2022.

Price Action: Shares of VPCC Impact Acquisition Holdings III are up 1% to $9.97 on Monday.