Before the 36-year-old became a chief executive, he couch-surfed at friends’ homes and pinched pennies on a $30,000-a-year salary. He also knows what it’s like to have written checks that bounced and to be hit with overdraft fees of $34 or more.
His backstory is all part of how he came up with the idea behind Dave.
Dave was launched in 2017 to help Americans avoid billions of dollars in overdraft fees charged by traditional banks. It is now a financial platform used by 10 million customers for banking, overdraft protection, building credit and finding side gigs.
Dave — which has raised $61 million in equity capital in its short corporate life and is profitable — generated $122 million in revenue in 2020. Nearly $200 million is anticipated this year and $533 million by 2023.
Dave isn’t Wilk’s first rodeo. He previously started a company that sold golfing products, then sold it for $110,000. With the cash, he traveled the world with a backpack, making stops in Vietnam, India, North Africa and Europe. In 2015, he raked in $85 million on the sale of another startup, AllScreen TV, a distributor of branded video content to social media websites.
In Wilk’s court is Mark Cuban, owner of the Dallas Mavericks and cast member on “Shark Tank.” The two met at a TechCrunch40 conference in San Francisco more than a dozen years ago, and the celebrity venture capitalist has had a big impact on Wilk’s life.
As Dave prepares to go public in the coming weeks via a merger with a Chicago-based blank check company that gives the fintech a $4 billion valuation, the financial technology app company has been settling into its new headquarters. It left its Mid-Wilshire address and is now in the Pacific Design Center in West Hollywood.
Wilk sat down with the Business Journal to discuss the future of Dave, his relationship with Cuban, expansion, fintech competition and other plans as the fintech readies to become a publicly traded company.
When did you start working on Dave?
I started working on the business back in 2015. It was a pretty extensive learning curve for me to even understand how to build a fintech business. I came from the advertising technology world. So, learning payments and banking was sort of a yearlong crash course. It was hard to figure this out. We got the team together in 2016. We raised our seed round in 2016 and went live as a business in April 2017, our first real day in the app store.
How many employees do you have?
We have close to 200 now. Those are full time, and they’re distributed across the U.S. now in 10 states.
Any offices besides L.A.?
Just L.A. That’s where the bulk of the employees are now, although we are now a virtual-first company. People can work wherever they want. If they’re in L.A., going back to the office is optional. We open our offices officially on Sept. 13, so we will see how many people are truly back or not.
Why do you think the banking system has failed?
Primarily, the cost structure is significant for existing incumbents. If you look at the infrastructure of these guys, JPMorgan Chase & Co. has 300,000 employees, tens of thousands of bank branches and onerous regulatory requirements. That always leads to a huge cost structure, which leads to high prices for consumers. And that is, first and foremost, why we think that there’s a real opportunity for something like Dave that really is a software technology to build a business that helps people at a fraction of the cost of legacy systems.
How does Dave fill the void?
I was a victim of this financial system. I paid hundreds of dollars in overdraft fees, and I was not able to move ahead financially from having a relationship with my bank. They told me nothing about my transactions; I knew nothing about my bills. I really feel that what the average American is dealing with is significant, and I just always had an idea in the back of my mind that if I could solve the overdraft problem — people hate it — it’d be a great marketable thing. How can we fix that to really benefit consumers in a way to help them succeed financially? That was really the crux of Dave. Do I detest the banks? No, because they need to charge these fees for their model to be profitable, but do I think there’s a much better way.
How does Dave make money?
So, we have a $1-a-month subscription fee, which we felt was quite reasonable for people to get into a service of what we offer. We make a large portion of our money from the interchange, which is what MasterCard pays us as sort of a revenue share of what they’re charging merchants. The interchange fee is a fee paid between banks for the acceptance of card-based transactions. We love that business model because it doesn’t cost the consumer anything. And we’re getting paid out by the card members.
Tell me about your first startup company, 1Day Sports?
One Day Sports focused on getting inexpensive golf product to the everyday consumer. When I was growing up, there was all of this latest golf stuff that came out every year. It was incredibly expensive, and I was the guy who was always trying to buy stuff, six months old or longer. I had a lot of used golf clubs. I did whatever I could to get the equipment. I would sell at the cheapest price in the country.
What happened to 1Day Sports?
In 2007, I ended up selling it when I graduated from Loyola Marymount for a small sum of money, enough to pack a backpack and go on a world trip. I was gone for about six months and circumnavigated the globe. When I came back, I pretty much spent all of my resources, and I knew the next thing I wanted to do was go build the next one. I was just trying to figure out what that idea was going to be.
What did you see during the pandemic?
We have over 10 million registered members on the product right now. And with Covid, it’s interesting. Our most popular feature is our overdraft protection. Instead of overdrafting at your bank account that’s going to charge you $34, members can come to Dave, and we’ll give you access to $100 of spending power without the interest or fees. During Covid, we saw a slowdown of that product because there was so much stimulus money coming in, combined with the fact that there were so many places shut down. There were fewer places to go and actually spend your money. So, we saw net savings go up for our population in a pretty meaningful way. Since then, we’ve seen a return to normalcy. That stimulus had a very short-term effect on people’s ability to achieve financial health.
What are Dave’s major products?
Dave Banking is our free banking service that has no minimum balance fees, has no overdraft fees, and you’re able to get your paycheck a couple of days early. It also comes with financial insights and a free membership to help you build credit. “Extra Cash” is our version of overdraft protection, where we will underwrite you for up to $100 of cash to spend on whatever you want. We also have “Side Hustle.” … We found that quite a few of our members were driving for Uber and Lyft as a way to make additional money on the side. We thought it’d be a really cool opportunity to launch our own marketplace for any gig company to market their services to our members to help them make more money.
Do you see a consolidation coming in the fintech space?
I definitely do. I don’t think that there’s going to be a dozen different companies that people wind up banking with. I think there’s going to be a few players in the peer-to-peer, banking and savings (spaces) that will dominate the industry. I think the rest will ultimately become too expensive or starve to make any progress. The ones in the fifth to 10th place will ultimately be better off being acquired. I think there will only be so much appetite for these certain kinds of companies in the public market.
Why did you want to go public?
I was the one wanting to go public. For us, having access to that kind of capital, having access to equity that we can use to incentivize employees, existing and future ones, and ultimately having currency that we could use for M&A — those are real opportunities. Just knowing that you’re banking with a public company, I think, gives us more cachet with the customer, that this is a reputable place that I can actually trust to deposit my paycheck into. That’s where we need to take the industry next. I think we’re still early innings, although it is picking up steam.
What kind of impact did billionaire Mark Cuban have on you, and does he continue to advise Dave?
He’s been an incredible force. I just got off an hourlong call with him. He is a huge force, and it’s a dream to be in business with Mark. I first met him in 2008 when I returned from my grand adventure and while I was figuring out what I wanted to do next.
How much did Mark Cuban invest in Dave?
I don’t know if we’ve ever disclosed that. His initial contribution was $200,000 in a seed round. Since then, on a multiple basis, he’s put in multiples of what he put in initially.
Does he plan to invest more in Dave when it goes public?
No, we have not asked him to put in further funds. He’s done so much with this company that, you know, it’s beyond anything monetary at this point.
