- Dave, a mobile finance app that helps users avoid overdraft fees, announced it is launching a banking product and that it raised $110 million in debt.
Dave is a mobile finance app that helps people avoid overdraft fees — which is launching a new banking market product called Dave Banking. Dave Banking helps younger generations by building their credit by automatically reporting everyday payments like rent and utility bills.
The cost of the Dave Banking service is $120 per year, but it is free for users who deposit their paychecks into the Dave Banking account. Plus the checking account also provides users with a $100 no-interest overdraft protection regardless of their current credit score.
Through Dave Banking, customers are able to access its AI-based forecasting tool, which can predict the account balance before the next payday and send text message alerts as the account gets closer to a $0 balance.
Along with launching a new banking product, Dave has also raised $110 million in debt led by Victory Park Capital. And Dave co-founder and CEO Jason Wilk told Forbes that the company is in talks with investors about raising additional capital at a valuation of nearly $1 billion.
One of Dave’s previous investors is tech billionaire and Dallas Mavericks team owner Mark Cuban. So far, Dave has raised $136.3 million in debt and venture funding.
The proceeds from the funding will be used for expansion from a personal finance app to a U.S. challenger bank.
“The company is doing really well from a cash position,” said Wilk via Forbes. “Given the company is producing cash flow right now to maintain control of the company we raised a large working capital round rather than selling more equity.”
Dave currently has 3.5 million customers and the company is partnered with gig economy companies for providing users with part-time job opportunities. This makes it easier for people who are dealing with paycheck to paycheck situations and are wary of traditional banks.
This is not the only company of Wilk’s that Cuban invested in. For a previous company, Wilk had relentlessly emailed Cuban before receiving a $300,000 check from him. Cuban saw a big return on investment when a $300,000 investment in Wilk’s previous company AllScreen for a 20% ownership following an $85 million acquisition by Zealot Networks.
Along with investing in Dave, Cuban also invested $150,000 in WriteyBoard several years ago, which is a company that Wilk co-founded. WriteyBoard sells stick-on white material that is an alternative to whiteboards.