US-based digital banking service Dave is set to go public through a merger with a special purpose acquisition company.
The move will value the banking app at around $4bn, assuming no redemptions.
Dave signed a definitive agreement with Victory Park Capital-sponsored VPC Impact Acquisition Holdings III (VPCC) to become a publicly-traded company.
Notably, Victory Park Capital also led Dave’s $110m funding round in 2019.
The latest deal is expected to provide more than $375m of cash to the combined firm’s balance sheet.
The business combination is expected to close in the third quarter or fourth quarter of 2021.
However, the closure is subject to regulatory approvals, green light from VPCC stockholders and other conditions. The deal is already approved by the board of directors of the two entities.
Launched in 2017, Dave helps Americans avoid paying overdraft fees charged by traditional lenders. It also offers banking support, financial insights and helps users in building credit and finding side gigs.
Currently, it has around ten million customers.
In December last year, the company launched banking services with a spending account and debit card. This service, dubbed Dave Banking, has more than 1.3 million members.
Dave CEO Jason Wilk said: “At Dave, we’re committed to improving the financial health of our members.
“We believe the legacy financial system has failed to deliver and today, more than 150 million people need our help to build financial stability. Dave is upending the banking industry with our suite of breakthrough financial products and making a meaningful impact on our customers’ lives.
“This transaction and continued support from our longstanding investors signify confidence in our strategy, vision and the significant growth opportunities ahead.”