3 Things to Know About the Mark Cuban-Backed Fintech Dave
Recently, digital banking app provider Dave (NASDAQ: DAVE) began trading on the Nasdaq after completing its merger with the blank-check company VPC Impact Acquisition Holdings III. Since then, the Mark Cuban-backed stock has been hit hard, down more than 42%. It's certainly not the only company to complete a merger with a special purpose acquisition company (SPAC) and then see shares struggle as investors question long-term financial projections and initial valuations at deal time. Here are three things to know about the latest fintech to go public.
The name Dave derives from the biblical story of David beating Goliath in combat. It refers to being an underdog, which is how Dave sees itself compared to the larger traditional banks. The fintech's main strategy is to target customers that the company believes are being taken advantage of by the larger financial institutions. The key area Dave focuses on right now is overdraft fees, claiming that the average American pays $300 to $400 in overdrafts annually. Dave says it has helped Americans save $1 billion in overdraft fees since it launched. It does this with its flagship product, ExtraCash, which offers members up to a $200 cash advance at no interest. Other products the app offers are a personal finance tool called Insights, which lets users track their monthly bills, and Side Hustle, which allows members to apply for various part-time jobs, such as working for Uber, Lyft, and Doordash. Dave also offers a checking account product. Dave currently makes almost all of its money through optional tips and instant transfer fees on ExtraCash, subscription fees for using Insights, and referrals from participating Side Hustle companies.
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Source Fool.com
