Mark Cuban-backed Dave will go public by merging with blank check company VPC Impact Acquisition Holdings III Inc.

Challenger bank Dave, which is backed by billionaire Mark Cuban and other investors such as Norwest, Section 32, Capital One, The Kraft Group, SV Angel, and The Chernin Group, said today it was going public by merging with VPC Impact Acquisition Holdings III, Inc. (NYSE: VPCC), a so-called Special Purpose Acquisition Company or SPAC. (Reuters)

A $4 billion merger

VPC Impact Acquisition Holdings III, Inc., the SPAC, or blank-check company, is sponsored by Victory Park Capital (VPC), a global investment firm headquartered in Chicago which has a track record of executing debt and equity financing transactions with some of the largest global fintech companies.

VPC has also been an investor in Dave and recently provided a $100 million credit facility to the company in January 2021.

The proposed merger would value Dave at $4 billion. It includes a $210 million concurrent private placement (PIPE) led by Tiger Global Management. Other participants in the PIPE include Wellington Management and Corbin Capital Partners.

Dave

Since its launch in 2017, the Dave banking app has helped Americans avoid billions of dollars in overdraft fees charged by traditional banks. It is now a financial platform helping 10 million customers with banking, financial insights, overdraft protection, and building credit.

Uniquely, it also helps its customers find side gigs.

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. The product already boasts more than 1.3 million members.

“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 Jason Wilk, CEO of Dave. “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.”

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