Dave, the Los Angeles banking app that launched a debit card with no monthly fees, is going public through a so-called blank-check company, the startup announced Monday.
Dave is joining the SPAC boom, merging with Victory Park Capital, or VPC, a Chicago-headquartered investment firm. Tiger Global Management is leading a PIPE backed by investors who have committed $220 million.
The deal, expected to close by the fourth quarter of 2021, was approved by Dave's board of directors and VPC Impact Acquisition Holdings III, Inc, a special purpose acquisition company sponsored by VPC.
These so-called blank-check vehicles have become enormously popular with more SPACs completing IPOs last year alone than in the previous 10 years combined.
Regulators still must approve the deal along with the firm's stockholders. Once public, the company will trade under the ticker symbol DAVE.
The financial management platform was launched in 2017 with a suite of banking tools like overdraft protection and a gig-economy job board. It currently has 10 million users.
Dave Banking released its debit card with no monthly fees and online banking app last December. It's amassed about 1.3 million members, according to the company.
The fintech startup is also on a hiring kick. In January, a former Apple executive who designed the Apple Card became Dave's chief commercial officer. A new marketing officer, president of engineering and chief people officer were brought on last year.
"With its strong management team, differentiated product suite and immense brand affinity, we believe Dave is well-positioned to achieve future growth and continue to disrupt the legacy financial system," Brendan Carroll, co-CEO of VPCC and co-founder of VPC, said in a statement.
Mark Cuban Companies, Section 32, The Kraft Group, SV Angel, Capital one and Norwest are among Dave's investors.
When fully vaccinated employees at one of L.A.'s biggest venture firms began trickling back into the office at the beginning of May, they felt a bit uncomfortable.
"Everyone felt awkward," remembers Mark Suster, Upfront Ventures' General Partner. "It was really awkward sitting in front of people again."
After more than a year confined to only seeing a few family members face-to-face and perhaps the occasional masked walk with friends and colleagues, it felt strange to suddenly be sitting unmasked next to each other in conference rooms.
Soon enough though, the strangeness of being back in the office faded.
"By week three it was like COVID was over," Suster said. "You forgot all the fears you had. That's what I expected and that's what I wanted."
It was only a few months ago that the number of COVID cases in L.A. County was so high that the idea of returning to offices seemed like a distant fantasy. Now, with over half of county adults vaccinated and daily new case rates plummeting, L.A. and the rest of California are on the brink of a complete reopening June 15.
But while many parts of life return to normal – Dodger Stadium is about to be full of cheering fans for the first time since 2019 – it is clear the workplace will be altered for a long time to come.
Companies like Snap Inc. have even recently pushed back reopening plans and many are still in a wait-and-see mode as they juggle conflicting regulations and employee morale.
"The options are almost limitless with hybrid workplace variations, which causes confusion," said Petra Durnin, head of market analytics at Raise Commercial Real Estate. "Many are waiting to see what everyone else does."
Even though traffic is back, L.A. offices are only about 25% full, according to weekly data collected by Kastle Systems, an access control provider used in more than 2,600 buildings nationwide. That is higher than the 17% occupancy in New York City but considerably lower than the 42% in fully reopened Houston.
While some executives have expressed impatience over getting their far-flung staffers back in the office as soon as possible, most are treading lightly – still making returning optional.
"Anyone who doesn't feel comfortable — especially if you're providing child care or if you live with someone you feel is compromised – it's not a problem," Suster said. "No one should feel pressure."
There are also the outliers, such as one small L.A. VC firm – which, of course, wanted to remain anonymous – where employees never stopped going into the office and where deals would not close without an in-person meeting.
But what's more common is employers actually becoming more lenient, even as the pandemic recedes.
Snap Inc. had originally told its 3,863 employees they would be required to return in September. But in late March it announced a "virtual first" model that means employees can work from home for as long as they want, according to a company spokeswoman.
Dave— a buzzy banking startup — abandoned its office in mid-city and now allows its 169 employees to work from anywhere in the U.S., except Hawaii. It plans to bring everyone together once or twice a year for team building and eventually open up offices for those who choose to come back in L.A. and San Francisco.
"To support our virtual first model, we will have one pay scale that we will apply nationally and will be based on the California labor market," added spokeswoman Jazmin Beltran. "Career mobility will not be dependent on where a team member chooses to live. Over time, we expect to have team members at all levels, including senior leadership, living across the country."
Pipe, one of the fastest growing fintech startups, relocated from Los Angeles to Miami during the pandemic but has opened what it calls "microhubs" in Atlanta, New York City, Texas, L.A. and Europe.
"These microhubs are important because while we have a distributed workforce, we also value in-person face time, both for productivity and for building a strong culture of trust among our team, customers and investors," said Harry Hurst, co-founder and co-CEO of Pipe.
Navigating Conflicting Regulations
Employers are treading lightly in part because of the often shifting and conflicting guidance from varying levels of government.
Even vaccinated employees still have to wear masks and social distance under California Division of Occupational Safety guidelines, even though the Centers for Disease Control said May 15th it was safe for fully vaccinated people to resume their pre-pandemic routines in most circumstances.
Cal/OSHA is set to vote on relaxing workplace rules June 3rd, but it is far from certain that its board will go as far as the CDC. Some members have already said the CDC went too far in loosening restrictions.
It is also unclear whether employers can require employees to be vaccinated and even if they likely can, few want to risk costly litigation.
Employers are also wary of alienating employees who have mostly stayed productive even as they have endured the stressful circumstances of the past year. This is after all a tight labor market where tech employees who have accrued a considerable amount of wealth over the last year may walk out the door if they are forced to be at their desk everyday.
"Companies surveyed employees in 2020 to see when they would want to go back to the office and were likely somewhat surprised to discover that not everyone wanted or needed to be working in person five days a week," Durnin said. "I think that's why they are opening doors but not demanding employees return."
At the same time, there is the sense that even though companies say they are fine with employees working from anywhere, the ones who want to advance better be back in the office as much as possible. The ones who choose to stay home risk seeing their careers languish.
Suster of Upfront Ventures, acknowledges what works for the relatively small number of employees at a VC firm may very well not work for larger companies. But he said in the few weeks that employees have been back he has noticed an uptick in productivity and creativity that would not have been possible on Zoom meetings.
"The norm is once we get over our fears it's time to get back to work," Suster said.
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Popular finance management app Dave has snagged former Apple executive Jarad Fisher, who conceived and designed the Apple Card. He will join the company as its chief commercial officer and follows a slew of other recent hires as the company tries to raise its profile.
The three-year-old startup run by co-founder Jason Wilk rolled out a digital bank account and debit card last year with no monthly fees. It saw two million user sign-ups for the wait list. Billionaire Mark Cuban was an early investor and board member of the Los Angeles-based company.
"Throughout my career I've created products that truly change lives by prioritizing simplicity and putting the customer at the center of the experience," Fisher said in a statement announcing the news this week. "Financial services have historically been complicated and difficult to use, especially for those who are most vulnerable."
In the newly created role, Fisher will lead partnerships and strategy behind Dave's product suite that's currently used by eight million customers. Before joining Apple, Fisher co-led a partnership between Delta Air Lines and American Express.
"His addition to the team comes on the heels of several executive additions that position Dave to become the world's most-loved fintech brand," Wilk said of Fisher.
Last year, the company also took on Jonathan Mildenhall, formerly of Coca-Cola Co. and Airbnb Inc., to lead marketing. Chien-Liang Chou joined as the new president of engineering and Shannon Sullivan as chief people officer.