Mark Cuban-sponsored Dave banking app goes public on a $ Four billion SPAC

Banking app Dave announced on Monday that the company will celebrate its launch through a SPAC merger with VPC Impact Acquisition Holdings III.

The deal is valued at $ 4 billion for Dave and is expected to close in the second half of this year. Upon completion of the transaction, it intends to be listed under the ticker symbol DAVE. A SPAC merger typically results in the target company merging into itself, and the listing status remains unchanged. VPCC is listed on the NYSE. Target companies can change the exchange on which they are traded. Dave has not yet officially specified the exchange it will be listed on.

The company, which was number 26 on last year’s CNBC Disruptor 50 list, was last valued at $ 1 billion in August 2019, according to PitchBook data.

Victory Park Capital, a global investment firm headquartered in Chicago, has a long track record of debt and equity financing transactions in the fintech space and was a long-time investor in Dave, who last gave the company a $ 100 million line of credit in January 2021. Has made dollars available. VPCC completed its IPO in March 2021.

Dave – short for the hero in the David vs. Goliath story – was designed to eliminate many of the features that customers at old banks hate. The company started with overdraft fees. For a membership fee of $ 1 per month, users can access checking accounts and up to $ 100 overdraft protection with no fees or interest. Members who sign up for a direct deposit also receive automated budgeting and the ability to build their creditworthiness by reporting rental and ancillary charge payments to credit bureaus.

The company says that through its ExtraCash feature, it has helped its customers avoid nearly $ 1 billion in overdraft fees and has helped gig employees make more than $ 200 million from their sideline jobs, through his sharing economy job board 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 rewarded for consistently doing the right thing.

“We at Dave are committed to improving the financial health of our members,” Wilk said in a statement accompanying the announcement of the deal. “We believe that the old financial system did not work and that more than 150 million people today need our help to build financial stability.”

The transaction includes a $ 210 million private placement led by Tiger Global Management. So-called PIPE funding is a mechanism for companies to raise capital from a select group of investors that enables the final market debut. Wellington Management and Corbin Capital Partners also take part.

SPACs hit the market at breakneck speed last year as an alternative to IPOs. However, the market has cooled recently due to regulatory concerns and a general pullback in SPAC stocks. The CNBC SPAC 50 Index, which tracks the 50 largest US pre-merger blank check deals by market capitalization, has slumped by around 4% over the year to date, while the Nasdaq has risen by around 7%.

So far this year, 330 SPACs have raised nearly $ 105 billion so far, according to SPAC Research, but experts warn investors that the recent frenzy and subsequent plunge in SPAC stocks could lead to riskier deals in the months ahead.

Correction: Dave has not yet officially specified the exchange he should be listed on.

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