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Fintech Company Dave to Become Public via Merger with VPCC

June 07, 2021, 08:08 AM
Filed Under: Lender Finance

Dave, the banking app on a mission to create financial opportunity that advances America’s collective potential, and VPC Impact Acquisition Holdings III, Inc., a special purpose acquisition company sponsored by Victory Park Capital (“VPC”), have entered into a definitive agreement for a business combination that will result in Dave becoming a publicly traded company listed under the ticker symbol “DAVE,” with an expected pro forma, fully-diluted equity value of approximately $4 billion, assuming no redemptions.

Launched in 2017 as an app to help Americans avoid billions of dollars in overdraft fees charged by traditional banks, Dave is now a financial platform helping 10 million customers with banking, financial insights, overdraft protection, building credit and finding side gigs. Dave aims to help foster the financial health of its members while also giving back to the community, having pledged over 13 million meals to Feeding America since launch. To date, Dave estimates that it has helped customers avoid nearly $1 billion in overdraft fees through its flagship feature, ExtraCash, and earn over $200 million in income through its gig-economy job board, Side Hustle.

In December 2020, the company launched Dave Banking, a spending account and debit card with no monthly fees, which has already accumulated more than 1.3 million members.

“At Dave, we’re committed to improving the financial health of our members,” said Jason Wilk, CEO of Dave. “We believe the legacy financial system has failed to deliver and today, more than 150 million people need our help to build financial stability. Dave is upending the banking industry with our suite of breakthrough financial products and making a meaningful impact on our customers’ lives. This transaction and continued support from our longstanding investors signify confidence in our strategy, vision and the significant growth opportunities ahead.”

Victory Park Capital, a global investment firm headquartered in Chicago, has a long track record of executing debt and equity financing transactions with some of the largest, most innovative global fintech companies. VPC has been a longstanding investor in Dave, most recently providing a $100 million credit facility to the company in January 2021. VPCC completed its initial public offering in March 2021.

“Dave’s growth and expansion over the last few years have been significant and we believe that the company has only scratched the surface of what it can achieve,” said Brendan Carroll, Co-CEO of VPCC and Senior Partner and Co-founder of VPC. “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.”

“We have supported Jason and Dave’s management team since 2018 and we’re proud to partner with the company as it delivers upon its vision to create financial opportunity for more consumers around the world,” added Jason Brown, Partner at VPC.

Dave has been backed by world-class investors including Norwest, Section 32, Capital One, Mark Cuban Companies, The Kraft Group, SV Angel and The Chernin Group. The company’s board of directors includes Jason Wilk; Dan Preston, CEO of Metromile; Bill Maris, Google Ventures Founder; Parker Barrile, Partner at Norwest Venture Partners; and Mark Cuban.

Upon completion of the transaction, the combined company is expected to have a fully-diluted equity value on a pro forma basis of approximately $4 billion, assuming no redemptions. It is expected to result in over $375 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $254 million of cash held in VPCC’s trust account (assuming none of VPCC’s stockholders redeem their shares) and a $210 million concurrent private placement (PIPE) led by Tiger Global Management with additional participation from Wellington Management and Corbin Capital Partners.

The proposed business combination has been unanimously approved by the Boards of Directors of Dave and VPCC, and is subject to approval by VPCC’s stockholders, regulatory approvals and other customary closing conditions. The business combination is expected to close late in the third quarter or in the fourth quarter of 2021.

A more detailed description of the business combination and a copy of the Agreement and Plan of Merger will be included in a Current Report on Form 8-K to be filed by VPCC with the United States Securities and Exchange Commission (the “SEC”). VPCC will also file a registration statement (which will contain a proxy statement/prospectus) with the SEC in connection with the business combination.

Centerview Partners LLC is serving as exclusive financial advisor and Orrick, Herrington & Sutcliffe LLP is serving as legal advisor to Dave. Citigroup and Jefferies are serving as capital markets advisors to VPCC and co-placement agents on the PIPE. White & Case LLP is serving as legal advisor to VPCC.

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