While mainstream banks often seem inaccessible, and their fee-laden structures can be difficult for consumers to understand, Santa Monica-based financial technology startup Dave Inc. just wants to be your friend.
Dave founder Jason Wilk said he formed the company in 2016 to combat overdraft fees.
“We wanted to displace the friend-and-family relationships, to avoid going to friends to borrow money because of overdraft fees.” Wilk said. “We wanted Dave to be the friend in your pocket that could do all these things for you.”
The company initially offered a mobile application that tracks upcoming bills and predicts expenses to avoid overdrafts, and it provided cash advances up to $75 from upcoming paychecks.
In June, the company launched its banking business, called Dave Banking, which it created to provide checking accounts to users fed up with chartered banks.
In less than six months, Wilk said, Dave Banking has signed up 1 million customers on its wait list.
Wilk said Dave Banking gains 12,000 new customers each week and plans to expand that number in coming months.
With $186 million in venture funding and debt — and backed by venture capital outfits including Playa Vista-based Chernin Group — Dave has ample resources to deliver on its mission.
Some of the funding helped Dave expand its staff to meet customer demand for its new banking product. The company, which now has roughly 80 employees, doubled its staff size in about six months, according to Wilk.
He added that Dave’s most recent raise, a $110 million funding round in June, gave the company a post-deal valuation at $1.2 billion.
Much of Dave’s funding remains in the coffers, Wilk noted, partly because the company hasn’t spent much on marketing. He said that a significant portion of the million-strong wait list for Dave Banking comes from people who were existing users of the app before the banking product was announced.
“We’re trying to build a good business, and (the funding) is for flexibility,” Wilk said. “We like having the cushion if we want to ramp up marketing and see a real opportunity.”
Dave’s investors include Kraft Group President Jonathan Kraft, former CBS Interactive Chief Executive Quincy Smith, and Radical Investments founder Mark Cuban. Other backers include JPMorgan Chase & Co. and San Francisco-based Financial Venture Studio.
Overall, it’s a good time to be a company focused on financial tech. Robert Le, emerging technology analyst for industry tracker PitchBook Data Inc., said Venture investment in financial technology companies in North America and Europe has accelerated over the last decade, reaching $18 billion in 2018 and $19.9 billion so far this year.
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