- Los Angeles-based money management company Dave recently raised $50 million in a round of funding at a valuation of $1 billion
Los Angeles-based fintech company Dave is a money management company that helps prevent consumers get hit with overdraft fees. The company is now valued at $1 billion following a $50 million round of funding, according to TechCrunch. The $50 million round was from Norwest and it will be used to expand its product and engineering team within the next 12 months.
How does it work? Dave has built an overdraft protection service that helps customers focus on the total balance that their account would show once the debits are applied.
“What was cool about our financial management product was that we were trying to use Dave as a replacement for their current bank,” said Dave co-founder and CEO Jason Wilk via TechCrunch.
Currently, Dave has more than 4 million users and it has about 800,000 people on the waiting list. Dave is FDIC insured through Memphis-based Evolve Bank and Trust.
To access Dave’s banking service, customers will have to install the company’s financial management app. And Dave charges $1 per month for its financial management tools. This fee also gives customers access to a cushion of about $50 and $75 to avoid getting hit with overdraft fees from their bank account.
As Dave monitors monthly payments, it also reports the activity to credit agencies in order to improve the credit ratings of its customers.
Plus Dave also asks for a tip whenever a customer taps into that cushion. For every tip that Dave receives, the company will plant a tree.
Wilk also told TechCrunch that the company is more valuable than $1 billion, but they did not want to get “too diluted on this round.” Ever since Dave signed the term sheet, the company already grew another 40%.
Four months ago, Dave announced a $110 million credit financing with Victory Park Capital and the company launched a banking product.