As Its SPAC Listing Nears, Neo-Bank Dave Has Its Sights Set on Crypto

Pat Maio
Pat Maio has held various reporting and editorial management positions over the past 25 years, having specialized in business and government reporting. He has held reporting jobs with the San Diego Union-Tribune, Orange County Register, Dow Jones News and other newspapers in Ohio, West Virginia, Maryland and Washington, D.C.
As Its SPAC Listing Nears, Neo-Bank Dave Has Its Sights Set on Crypto
Online Banking Startup Dave To Go Public via SPAC at $4B Valuation

Los Angeles-based banking app Dave is poised to debut as a publicly traded company via a SPAC deal this week, and has plans to use some of the proceeds to wade into the crypto waters.

Dave, which is valued at $4 billion and backed by famed investor Mark Cuban, anticipates closing its merger with blank-check firm VPC Impact Acquisition Holdings III this Wednesday. If all goes according to plan, it will begin trading on the Nasdaq stock exchange on Thursday.


According to Kyle Beilman, Dave’s chief financial officer, the fintech company is looking to deploy some of the $465 million raised from the SPAC deal to explore cryptocurrency product offerings for its 11 million customers.

One area that Beilman said is under consideration: money transfers, which are ripe for disruption by crypto and blockchain technology. He cited the U.S.-Mexico remittance corridor, which is among the largest in the world with more than $40 billion sent from the U.S. to Mexico in 2020, according to Mexico’s central bank.

\u200bDave Chief Financial Officer Kyle Beilman

Dave Chief Financial Officer Kyle Beilman

“It’s hard to ignore the impact that crypto is having on the overall market, and I think there’s an opportunity for us to participate there,” Beilman told dot.LA. “We see the U.S.-Mexico cross-border remittance market as an interesting potential opportunity for us to explore.”

Dave already has well-placed partners in the crypto sector. In August, Alameda Research—a crypto trading firm founded by Sam Bankman-Fried, the billionaire founder and CEO of crypto exchange FTX—invested $15 million in Dave through a private placement funding deal in advance of the SPAC merger. That investment was part of a larger $210 million private investment in public equity (PIPE) deal, led by New York-based investment firm Tiger Global Management, that will flow into Dave’s coffers after its trading debut.

“It gives us a little bit more firepower leading up to the [SPAC] close,” said Beilman, noting that Dave and FTX are exploring potential partnerships. “It really highlights their commitment to the business that they were just willing to step up early and support us.”

Dave is part of a wave of L.A.-based tech firms that have pursued SPAC mergers over the past year—a group that includes fellow “neo-bank” startup Aspiration, as well as electric automakers Faraday Future and Xos.

After an explosive 2020, the SPAC market cooled somewhat in 2021 thanks in part to regulatory concerns. In the case of Dave, heightened regulatory scrutiny caused the company to delay its IPO by several months, forcing it to downsize its financial projections for 2021 and beyond, Beilman explained.

After generating revenues of $122 million in 2020, Dave had expected to grow that figure by 58% to $193 million in 2021. But after pushing back its plans for a late-summer IPO, that target was cut by roughly 20% to the mid-$150 million range, Beilman said.

Having delayed some of its planned investment initiatives as a result, Dave is now eyeing acquisitions and new product developments with the windfall from the SPAC merger.

“M&A is a really attractive potential way for us to accelerate our ability to be that one-stop shop and be at the center of our members’ financial lives,” Beilman said.

Dave also is considering a non-crypto crowdfunding product, modeled after GoFundMe, which would allow people to raise money for events and expenses, and has plans to launch a peer-to-peer money-transfer product similar to Venmo, Beilman said.

The startup, founded in 2017 by CEO Jason Wilk, recently moved its headquarters in October from Mid-Wishire to the Pacific Design Center in West Hollywood. It ramped up its workforce in 2021—growing to more than 265 employees, with plans to eclipse 400 within the next year or so.

“The bulk of the hiring will be done here in L.A.,” said Beilman, adding that the company is hiring engineers, marketing specialists and others across the country as it builds out its business.

🤠Musk Picks Texas and 🔥Tinder AI Picks Your Profile Pictures
Image Source: Tinder

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Tinder is altering dating profile creation with its new AI-powered Photo Selector feature, designed to help users choose their most appealing dating profile pictures. This innovative tool employs facial recognition technology to curate a set of up to 10 photos from the user's device, streamlining the often time-consuming process of profile setup. To use the feature, users simply take a selfie within the Tinder app and grant access to their camera roll. The AI then analyzes the photos based on factors like lighting and composition, drawing from Tinder's research on what makes an effective profile picture.

The selection process occurs entirely on the user's device, ensuring privacy and data security. Tinder doesn't collect or store any biometric data or photos beyond those chosen for the profile, and the facial recognition data is deleted once the user exits the feature. This new tool addresses a common pain point for users, as Tinder's research shows that young singles typically spend about 25 to 33 minutes selecting a profile picture. By automating this process, Tinder aims to reduce profile creation time and allow users to focus more on making meaningful connections.

In wholly unrelated news, Elon Musk has announced plans to relocate the headquarters of X (formerly Twitter) and SpaceX from California to Texas. SpaceX will move from Hawthorne to Starbase, while X will shift from San Francisco to Austin. Musk cited concerns about aggressive drug users near X's current headquarters and a new California law regarding gender identity notification in schools as reasons for the move. This decision follows Musk's previous relocation of Tesla's headquarters to Texas in 2021.

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  • Penguin Random House agreed to acquire comic book publisher Boom! Studios from backers like Walt Disney Co. - learn more

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Top LA Accelerators that Entrepreneurs Should Know About

Los Angeles, has a thriving startup ecosystem with numerous accelerators, incubators, and programs designed to support and nurture new businesses. These programs provide a range of services, including funding, mentorship, workspace, networking opportunities, and strategic guidance to help entrepreneurs develop their ideas and scale their companies.


Techstars Los Angeles

Techstars is a global outfit with a chapter in Los Angeles that opened in 2017. It prioritizes local companies but will fund some firms based outside of LA.

Location: Culver City

Type of Funding: Pre-seed, early stage

Focus: Industry Agnostic

Notable Past Companies: StokedPlastic, Zeno Power


Grid110

Grid110 offers no-cost, no-equity programs for entrepreneurs in Los Angeles, including a 12-week Residency accelerator for early-stage startups, an Idea to Launch Bootcamp for pre-launch entrepreneurs, and specialized programs like the PledgeLA Founders Fund and Friends & Family program, all aimed at providing essential skills, resources, and support to help founders develop and grow their businesses.

Location: DTLA

Type of Funding: Seed, early stage

Focus: Industry Agnostic

Notable Past Companies: Casetify, Flavors From Afar


Idealab

Idealab is a renowned startup studio and incubator based in Pasadena, California. Founded in 1996 by entrepreneur Bill Gross, Idealab has a long history of nurturing innovative technology companies, with over 150 startups launched and 45 successful IPOs and acquisitions, including notable successes like Coinbase and Tenor.

Location: Pasadena

Type of Funding: Stage agnostic

Focus: Industry Agnostic, AI/Robotics, Consumer, Clean Energy

Notable Past Companies: Lumin, Coinbase, Tenor


Plug In South LA

Plug In South LA is a tech accelerator program focused on supporting and empowering Black and Latinx entrepreneurs in the Los Angeles area. The 12-week intensive program provides early-stage founders with mentorship, workshops, strategic guidance, potential pilot partnerships, grant funding, and networking opportunities to help them scale their businesses and secure investment.

Location: Los Angeles

Type of Funding: Pre-seed, seed

Focus: Industry Agnostic, Connection to South LA and related communities

Notable Past Companies: ChargerHelp, Peadbo


Cedars-Sinai Accelerator

The Cedars-Sinai Accelerator is a three-month program based in Los Angeles that provides healthcare startups with $100,000 in funding, mentorship from over 300 leading clinicians and executives, and access to Cedars-Sinai's clinical expertise and resources. The program aims to transform healthcare quality, efficiency, and care delivery by helping entrepreneurs bring their innovative technology products to market, offering participants dedicated office space, exposure to a broad network of healthcare entrepreneurs and investors, and the opportunity to pitch their companies at a Demo Day.

Location: West Hollywood

Type of Funding: Seed, early stage, convertible note

Focus: Healthcare, Device, Life Sciences

Notable Past Companies: Regard, Hawthorne Effect


MedTech Innovator

MedTech Innovator is the world's largest accelerator for medical technology companies, based in Los Angeles, offering a four-month program that provides selected startups with unparalleled access to industry leaders, investors, and resources without taking equity. The accelerator culminates in showcase events and competitions where participating companies can win substantial non-dilutive funding, with the program having a strong track record of helping startups secure FDA approvals and significant follow-on funding.

Location: Westwood

Type of Funding: Seed, early stage

Focus: Health Care, Health Diagnostics, Medical Device

Notable Past Companies: Zeto, Genetesis


KidsX

The KidsX Accelerator in Los Angeles is a 10-week program that supports early-stage digital health companies focused on pediatric care, providing mentorship, resources, and access to a network of children's hospitals to help startups validate product-market fit and scale their solutions. The accelerator uses a reverse pitch model, where participating hospitals identify focus areas and work closely with selected startups to develop and pilot digital health solutions that address specific pediatric needs.

Location: East Hollywood

Type of Funding: Pre-seed, seed, early stage

Focus: Pediatric Health Care Innovation

Notable Past Companies: Smileyscope, Zocalo Health


Disney Accelerator

Disney Accelerator is a startup accelerator that provides early-stage companies in the consumer media, entertainment and technology sectors with mentorship, guidance, and investment from Disney executives. The program, now in its 10th year, aims to foster collaborations and partnerships between innovative technology companies and The Walt Disney Company to help them accelerate their growth and bring new experiences to Disney audiences.

Location: Burbank

Type of Funding: Growth stage

Focus: Technology and entertainment

Notable Past Companies: Epic Games, BRIT + CO, CAMP


Techstars Space Accelerator

Techstars Space Accelerator is a startup accelerator program focused on advancing the next generation of space technology companies. The three-month mentorship-driven program brings together founders from across the globe to work on big ideas in aerospace, including rapid launch services, precision-based imaging, operating systems for complex robotics, in-space servicing, and thermal protection.

Location: Los Angeles

Type of Funding: Growth stage

Focus: Aerospace

Notable Past Companies: Pixxel, Morpheus Space



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🚁 One Step Closer to Air Taxis in LA
Image Source: Joby Aviation

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Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.


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