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As the SPAC listing approaches, neo-bank Dave has its sights set on Crypto

Los Angeles-based banking app Dave is set to debut as a publicly traded company this week via a SPAC deal and plans to use some of the proceeds to wade into the crypto waters.

Estimated at $ 4 billion and backed by famous investor Mark Cuban, Dave expects to complete his merger with blank check company VPC Impact Acquisition Holdings III this Wednesday. If everything goes according to plan, trading on the Nasdaq stock exchange will begin on Thursday.

According to Kyle Beilman, Dave’s chief financial officer, the fintech company plans to use a portion of the $ 465 million from the SPAC deal to explore cryptocurrency products it offers to its 11 million customers.

One area Beilman said is being considered: money transfers ripe for disruption from crypto and blockchain technology. He cited the remittance corridor between the US and Mexico, which, according to the Mexican central bank, is one of the largest in the world, with more than $ 40 billion transferred from the US to Mexico in 2020.

Dave Chief Financial Officer Kyle Beilman

“It’s hard to ignore the impact crypto has on the overall market and I think there is a way for us to participate,” Beilman told dot.LA. “We see the US-Mexico cross-border money transfer market as an interesting potential opportunity to explore.”

Dave already has well-placed partners in the crypto space. In August, Alameda Research – a crypto trading firm founded by SAM Bankman-Fried, the trillionaire founder and CEO of Crypto Exchange FTX – invested $ 15 million in a Dave in Dave through a private internship funding supply upfront the Spac Fusion. This investment was part of a larger private investment of $ 210 million in public equity (pipe) led by New York-based investment firm Tiger Global Management that will flow into Dave coffers upon its trading debut.

“It gives us a little more firepower before it goes to the [SPAC] close, ”said Beilman, noting that Dave and FTX are reviewing potential partnerships. “It really shows their commitment to the business that they were just ready to jump in early and support us.”

Dave is part of a wave of LA-based tech companies that have tracked SPAC mergers over the past year – a group that includes other “neo-bank” startups Aspiration and electric car makers Faraday Future and Xos.

After an explosive 2020, the SPAC market cooled somewhat in 2021, also due to regulatory concerns. In Dave’s case, tightened regulatory scrutiny resulted in the company delaying its IPO for several months, forcing it to downgrade its financial guidance for 2021 and beyond, Beilman said.

After sales of $ 122 million in 2020, Dave had expected to increase that figure by 58% to $ 193 million in 2021. However, after postponing his IPO plans in late summer, that goal was reached by mid-$ 150 million, Beilman said.

After Dave delayed some of his planned investment initiatives, Dave is now looking to make acquisitions and new product developments with the stroke of luck from the SPAC merger.

“M&A is a really attractive way for us to accelerate our ability to be that one stop shop and be at the center of our members’ financial lives,” said Beilman.

Dave is also considering a non-crypto crowdfunding product along the lines of GoFundMe that would allow people to raise money for events and expenses, and plans to launch a peer-to-peer money transfer product similar to Venmo Beilman said.

Founded in 2017 by CEO Jason Wilk, the startup moved its headquarters from Mid-Wishire to the Pacific Design Center in West Hollywood in October. The company increased its workforce in 2021 – to more than 265 employees, with plans to overshadow 400 within the next year.

“Most of the hiring will be here in LA,” Beilman said, adding that the company is hiring engineers, marketers and others across the country to help grow its business.

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