10-Q, Member Exclusive

Is Dave a ‘fintech survivor’ after all?

  • Dave's Q4 2022 results show that this might just be the end of a rocky road for the neobank -- meanwhile, it is bracing for 2023 head-on.
  • Apple's shares regained momentum last week following Goldman Sachs analysts' optimistic outlook -- based on the firm's new product innovation and margin expansion driven by services.

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Is Dave a ‘fintech survivor’ after all?

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Is Dave a 'fintech survivor' after all?

Dave's Q4 2022 results show that this might just be the end of a rocky road for the neobank -- meanwhile, it is bracing for 2023 head-on.


Neobank Dave reported its Q4'22 results on Tuesday, indicating factors that helped the company to stay afloat during the market turbulence.

Dave reported a non-adjusted net loss of $21.5 for the quarter.

  • GAAP revenue was $59.6 million during Q4, up 45% from the same period last year. 
  • GAAP net loss was $21.5 million compared to $15.2 million in the fourth quarter of 2021 -- on a quarterly basis, improved by 55% from Q3 2022.
  • Adjusted EBITDA was a loss of $11.8 million compared to a loss of $12.6 million during the year-ago period and up by 59% from Q3 2022.

Dave started off in 2017 as a disruptor to the $38 billion in overdraft fees banks collected in 2016 alone. Dave lets users decide what is fair to tip (optional) without charging interest for providing services related to credit building and side gigs for everyday Americans.

The company said it has helped millions of customers avoid overdraft fees through its ExtraCash feature using AI-driven underwriting, and helped gig workers earn money from side hustles through its sharing-economy job board, Side Hustle.

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

Despite being red-hot in 2021, the once-flying high SPAC market cooled down in 2022 finding it hard to attract and retain investor attention -- amid a slew of challenges, spanning from regulatory pressure to the bite of higher interest rates and to the slowing M&A deal-making environment.

In March 2022, FTX invested $100 million in Dave as part of a crypto partnership. FTX was later accused of swindling FTX customers out of billions of dollars -- however, Dave remained out of harm's way as the firm wasn't found associated with any misdeed in connection to the FTX debacle.

Later in 2022, Dave got caught up in hearsay about getting listed in the money-losing companies during the fintech downturn after it went public. Additionally, the company was dealt a major blow by the Fed's strategy of increasing interest rates to fight inflation.

In Q3 2022, the company’s losses expanded to $47.5 million from $7.9 million in 2021, with an all-time sharp 97% decline in its shares in November.

To combat the turmoil at the time, CEO Jason Wilk proactively re-directed the company's strategy to achieve profitability by lowering customer acquisition costs and retaining customers through new techniques like making money through paid surveys.

The net losses in Q4 2022 were largely driven by higher non-cash stock compensation expenses and investments made by the neobank in product engineering and marketing personnel that were needed to execute growth initiatives.

By redirecting its strategies the neobank navigated its way through the challenging fourth quarter and weathered the economic storm in comparison to Q3 2022:

  • Added 543,000 Net New Members while reducing customer acquisition costs by 31%. Total members increased by 7% to 8.3 million.
  • Monthly Transacting Members (MTMs) increased by 4% to 1.9 million. Transactions per MTM increased by 12% to 5.2.
  • ExtraCash originations increased 6% to $801 million while the 28-Day delinquency rate improved 49 basis points to 3.58%.
  • Dave Debit Card spend increased 34% to $263 million compared to $197 million.

"We've leaned in on our AI development which has helped us in a few ways. First, it's improved our underwriting to safely increase ExtraCash limits for members while reducing default rates. Second, we've been able to transition more customer support to AI. The combination is improving revenue and reducing costs, all of which makes us well-suited to weather an economic storm," Jason Wilk, CEO Dave told Tearsheet.

Going forward, the company feels confident to weather the continuing headwinds to 2023 growth projections at large.

"Dave performs well in every macroeconomic environment, aside from a heavy stimulus environment, such as during the onset of the COVID-19 pandemic. The current economic picture for our customers is good, and Dave continues to see fewer defaults on ExtraCash advances. Our customer base is well represented in the record low unemployment rates that keep being reported, and we feel very good about that," he added.

As of March 08, 2023, Dave has just an $89.9 million market capitalization, putting it in the 32nd percentile of companies in the fintech industry.

Market recap

Fintech stocks tumbled over the past week, however, Big Tech stocks were on the path to profitability

Fintech stocks had a sharp dip reflecting continuing headwinds to 2023 growth projections.

Stock price weekly % change, showing the performance of fintech stocks.

Oportun - down 16% to $5.02 per share

  • Oportun hasn't been able to impress analysts with its performance lately followed by its continuing debt lawsuits.

Affirm - down 13% to $11.31 per share

  • In a move to manage its operating expenses, Affirm has decided to wind down its operations in Australia, thus downsizing its BNPL market share. The move has hurt its stock.

Apple - up 5% to $152.6 per share

  • Apple's shares regained momentum last week following Goldman Sachs analysts' optimistic outlook -- based on the firm's new product innovation and margin expansion driven by services.

Editor's picks

Tweet of the week

Tweet of the week related to stocks.

Just look at the charts

SoFi stocks performance.
Returns of Equity Hedge Index and 60/40 blend over historical periods.

This week's reads

BNPL platform Affirm quits Australia


A month after laying off 19% of its workforce, BNPL platform Affirm is quitting the Australian market. In a notice on its website, the company says: "As of 28 February 2023, Affirm has made the decision to begin an orderly wind-down of our operations in Australia."

Intuit pulls from Mint to build new Credit Karma 'Net Worth' tool


Intuit-owned Credit Karma is expanding from credit building into wealth building this week with its new launch, Net Worth. The new tool aims to help the company’s 120 million U.S. members track their net worth, and places Credit Karma one step closer to its goal of becoming a full-service personal financial management platform.

Walmart teams with Citi on digital lending for 10,000 suppliers


Retail giant Walmart has teamed up with Citi to introduce the Bridge platform to its network of 10,000 SMBs. Bridge built by Citi is a digital platform that connects SMBs with a group of 70+ lenders for loans of up to $10 million.

Amazon and Better.com’s unlikely pairing


Last week, Amazon struck a deal with online mortgage lender Better.com to offer home financing to Amazon employees. The idea is that, through the partnership, Amazon employees will be able to pledge their AMZN stock as security to borrow for a first or even second home.

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