LA-based banking app Dave marks debut on Nasdaq

• Dave became one of the first companies to close a SPAC merger and go public in 2022

• The stock opened at $8.27 apiece under ticker symbol “DAVE”

Los Angeles-based banking app Dave became one of the first companies to close a SPAC merger and began trading on the Nasdaq on Thursday.

The stock opened at $8.27 apiece under the ticker symbol “DAVE,” giving the company a market cap of roughly $3 billion. Dave shares were lower by as much as 8% in early, light volume trading, with its market cap dipping below the $3 billion level.

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Dave’s user base has nearly 10 million customers and offers banking, financial insights, overdraft protection, building credit, and finding side gigs. The startup aims to help its members improve their financial health and has assisted them in avoiding some $1 billion in overdraft fees with its ExtraCash benefit.

This feature has profited many gig workers earn hundreds of millions of dollars from side hustles through its sharing-economy job board, Side Hustle.

Third-quarter revenue for the company was up 30% in 2021 year-over-year, from $120 million to roughly $158 million, according to the prospectus. Transaction revenue grew 956% year-over-year, while service revenue increased 22%.

Chicago-based investment firm, Victoria Park Capital, is one of the investors of the app which provided a $100 million credit facility to the company in January 2021. The SPAC deal also involved a $210 million investment led by Tiger Global Management via a PIPE-funding round. Wellington Management and Corbin Capital Partners are also participating.

SPACs are formed to raise capital through a public listing and merge with a private company, which intends to go public without going through the hassle of traditional IPOs.

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Significant firms like sports betting company DraftKings Inc, and British business tycoon Richard Branson’s space tourism company Virgin Galatic Holdings Inc, are some of the few companies, which went public through a SPAC merger.

Picture Credits: PYMNTS.com