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

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.

Dave Chief Financial Officer Kyle Beilman

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.