The merger with VPC Impact Acquisition Holdings III Inc. was announced on June 7. The deal is expected to close late in the third quarter or sometime in the fourth quarter.
Dave, which is backed by billionaire Mark Cuban, will trade under the ticker symbol DAVE.
The merger comes at a time of increasing regulatory interest in fintechs, which want to take advantage of growing demand for online banking services.
Dave is involved in peer-to-peer lending. P2P is the practice of lending money to individuals or businesses through online services that match lenders with borrowers.
Other P2P platforms include downtown-based mobile platform app SoLo Funds Inc., a mobile exchange that lines up sums of money under $1,000 for borrowers short on cash; Santa Monica-based Tala; Irvine-based microinvestor Acorns Grow Inc.; and San Francisco-based nonprofit lender Kiva Microfunds.
P2Ps operate in a gray area in the banking world. They don’t face much registration or licensing by state and federal regulators because they don’t technically charge interest or fees for their services.
In May, the California Department of Financial Protection and Innovation hired Christina Tetreault, a veteran consumer advocate, to lead a newly created Office of Financial Technology and Innovation.
VPC Impact is a SPAC sponsored by private capital manager Victory Park Capital Advisors, which has invested about $6 billion across more than 120 investments since its founding in 2007.
“We believe the legacy financial system has failed to deliver, and today, more than 150 million people need our help to build financial stability,” said Dave Inc. Chief Executive Jason Wilk.
The deal is expected to result in more than $375 million of cash on the combined company’s balance sheet, in addition to a $210 million private placement led by New York-based Tiger Global Management with additional participation from Boston-based Wellington Management Co. and New York-based Corbin Capital Partners. Dave also has received backing from Palo Alto-based Norwest Venture Partners, Los Altos-based Section 32, Capital One Financial Corp., Mark Cuban Cos., Boston-based Kraft Group, San Francisco-based SV Angel Management and Playa Vista-based Chernin Group.
Dave was launched in 2017 as an app to help Americans avoid billions of dollars in overdraft fees charged by traditional banks. It is now a financial platform helping 10 million customers with banking, overdraft protection, building credit and finding side gigs.
To date, Dave estimates it has helped customers avoid nearly $1 billion in overdraft fees through its flagship feature, ExtraCash, and earn more than $200 million in income through its gig-economy job board, Side Hustle.
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