Mark Cuban-Backed Bank Startup Valued at $4 Billion in SPAC Deal

(Bloomberg) -- Dave, a banking startup that’s been backed by investors including Mark Cuban and Capital One Financial Corp., agreed to go public in a deal with a blank-check firm that values the company at $4 billion.

Dave also secured a private placement, alongside the transaction with VPC Impact Acquisition Holdings III Inc., of $210 million from investors including Tiger Global Management, Wellington Management and Corbin Capital Partners, the companies said Monday in a statement. The deal is expected to close late into the third, or in the fourth quarter.

Dave launched in 2017 with the goal of helping consumers avoid overdraft fees, an effort it says has led customers to circumvent nearly $1 billion in those charges. Such fees faced scrutiny from lawmakers last month during hearings with bank executives, with House Financial Services Committee Chairwoman Maxine Waters chiding firms for raking in “billions” in overdraft fees last year during the pandemic.

The startup is one of the latest fintech firms to go public through a merger with a SPAC. Acorns Grow Inc., an investing startup, agreed in May to go public through that route, while mortgage and real estate startup Better HoldCo Inc. announced an agreement for a merger with a SPAC earlier that month.

Dave and VPC Impact Acquisition Holdings’ transaction expands the relationship between the startup and Victory Park Capital, which backs the blank-check company. Victory has previously invested in Dave and provided a $100 million credit facility to the banking firm in January. Dave also created a spending account and debit card with no monthly fees, called Dave Banking, last year.

Dave was advised by Centerview Partners LLC and Orrick, Herrington & Sutcliffe LLP. The blank-check company sought advice from Citigroup Inc., Jefferies Financial Group LLC and White & Case LLP.

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