New challenger bank Dave now worth $1 billion after recent investment
- With an investment from Norwest, Dave hits unicorn valuation.
- The company still needs to prove it can move PFM users to become banking customers.
The low down: Dave made a name for itself as a PFM that garnered 3.5 million users relatively quietly.
- Budgeting focused: Part of Dave’s early appeal was the firm’s use of AI to help users understand their budget and $75 worth of overdraft protection to provide users an extra cash cushion to avoid fees.
- Launching banking services: In June 2019, the company launched banking services with Evolve Bank and Trust to provide users with added banking functionality like a checking account and extended overdraft protection to $100.
- Using PFM as the hub: Dave’s free PFM serves as a hub to acquire new users that can then be upsold to open a bank account. The company announced it now has 4 million PFM users, up from 3.5 million in June.
- Banking slowly rolling out: The company also said it has 800,000 on a waiting list for its banking offering.
US market warming up: Dave joins a relatively crowded US market for digital banking which has some incumbents, startups, and ancillary players vying for marketshare.
- Chime rings the bell: Chime is the player to beat now in the upstart banking market in the US. In September 2019, the company announced it has 5 million accountholders and introduced its own form of overdraft protection.
- The Europeans are (still) coming: Most of the major European challenger banks have communicated an interest to launch in the US. So far, N26 is really the only consumer-oriented international challenger that has launched publicly in the US.
- Go deeper: Tearsheet’s Outlier members can track the growth of challenger banks here