The man who built a bank for people banks don't want - Jason Wilk [Dave]

Dave fell from a $5bn SPAC to a $50m market cap

Dave is a neobank for the customers mainstream banks do not want, and it started with the $34 overdraft fee. Wilk launched credit before checking accounts because a charter was too much work, underwriting a $75 loan on cash flow data rather than FICO. The bet nearly died when a SPAC listing at over $5bn fell to a $50m market cap in nine months.

Takeaways

• Dave launched credit before checking accounts. Wilk says a bank charter or partner in 2016 would have been too much work, so Dave sold credit first. It underwrote a $75 loan, the smallest in the country, on cash flow data, because FICO reflects long-duration credit.
• Series A took 120 meetings to close. The seed round was easy because Wilk reused investors from his previous company, one of whom wrote a cheque sight unseen for a stake worth over $150m. The Series A took 120 meetings. The $10m cheque brought loss rates from 20% to a few percent.
• The credit card turns capital every eight days. Gross spreads on every credit transaction are above 5% and capital returns every eight to ten days. The 120-day loss rate is near 1%, and 98% of originations go to repeat users as each model version tests 100 to 200 more features.
• Wilk sees venture capital as high-APR debt. He dislikes preference stacks and says smaller competitors who raised several hundred million at billion-dollar valuations found the money a curse. He prefers a conservative valuation with profitability and room to launch products.
• 2026 guidance targets $700m revenue and $300m EBITDA. Dave burned $100m in 2022 on a couple of hundred million of run rate. Guidance for 2026 is more than $700m of revenue and $300m of EBITDA, a $400m earnings swing.

From a $5bn SPAC to a $50m market cap

1. Dave listed in January 2022 through a SPAC, negotiating a valuation over $5bn, and briefly traded as the best performer of its cohort.
2. Tiger Global had no lockup and sold everything as growth fell out of favour and redemptions hit.
3. The market cap fell to $50m within nine months, at times below cash, a decline Wilk says had nothing to do with the business.
4. Dave kept burning rather than cut, since a company of fewer than 300 people could not cut its way to profit. It waited to cross the user threshold, and the market cap is now nearly $4bn.

The public-company playbook

• Quarterly business reviews, weekly KPI meetings and OKRs set the rhythm, with virtual-first hiring.
• After each print Dave compares its model with the analysts' models, and they update their numbers and ratings.