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‘Banking for humans’: Dave launches credit-building banking for its 3.5M users

  • Quietly, Dave has become a popular personal finance app.
  • Now, with new funding, the company is launching a bank account and other new features.
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‘Banking for humans’: Dave launches credit-building banking for its 3.5M users

When Dave launched, the personal finance manager flew under the radar. But 3.5 million registered users turn to Dave to help them track expenses, avoid overdraft fees, and get paid early.

Today feels like Dave’s coming of age party. The company is launching a full blown bank account, something co-founder Jason Wilk is calling ‘Banking for Humans’. In addition to the personal finance functionality Dave is known for, Dave will also help clients build credit by reporting expenses like rent and utilities. The Dave account comes with overdraft protection and helps account holders find side hustles and forecast future expenses.

Dave is also announcing a $110 million debt raise from Victory Park to scale the company on its way to become a viable challenger bank in the US.

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The following excerpts were edited for clarity.

You’ve founded 3 other companies. Why get involved in banking?

I had my own personal gripes with banking. I was quite frustrated on a day to day basis trying to know what my daily expenses were until I got paid next. I felt like if that was a pain point for me, I can only imagine what it’s like for the majority of Americans who live paycheck to paycheck and who get taken advantage of with high overdraft fees.

Talking to Mark Cuban, who’s an investor, about this, he didn’t sell his big company until he was in his forties. He was also a victim of overdraft. When I was talking to him about my idea for Dave, it immediately resonated with him.

Timing on launching Dave

NPS is at an all-time low for big banks. Younger people are getting into banking now and they have no affinity for a Wells or a Chase. They don’t care about bank branches if they can open up a bank account via an app in just a few seconds. They’re open to more sophisticated offerings that have their back, have AI to help them understand their budgets, and give them an extra cash cushion to avoid overdraft fees. The technology and infrastructure was there but I felt the industry was missing a real consumer-focused brand that was all about brand loyalty.

With the tools out there like Plaid and bank charter partners, what’s missing is a great true consumer brand. We named the company Dave because we wanted people to think about this new bank as a friend who has their back. The deeper meaning is David versus Goliath. We’re going up against the big banks, a tall order. Everyone has a friend or family member named Dave (although we don’t have a single person in the company with that name).

Dave now offers a bank account

We’ve tried to stay under the radar. We’re announcing for the first time that we have 3.5 million registered users. We’re also announcing that we’re launching our own banking product with our partner Evolve Bank and Trust. Not only can users connect their existing banks to use our budgeting tools, but they can also open a bank account with our partner. This was our vision all along.

Before, Dave was an awesome personal financial management product. We can tell you all about your bills and expenses until your paycheck date. We also help you avoid overdraft fees with intelligent alerts and give you the ability to grab $75 from your upcoming paycheck. We also help you find a job.

Now, banking with Dave enhances all these services with real time updates. We have a really cool new credit building features, so if you pay your rent and your utilities through Dave, we’ll report those to the bureaus so you can build credit. That will be exclusive to Dave banking customers. We give Dave banking customers $100 — instead of $75 — of overdraft cushion. And we’ll provide more exclusive job opportunities to Dave banking customers.

We’re also announcing a $110M debt facility with Victory Park.

Vision for Dave

The mantra early on in our business was let’s build products that banks won’t. So, we really tried to think about what would be accretive to a user’s financial life that a bank would never do. Initially, we decided banks would never try to use data to predict your upcoming expenses, given the liability of getting it wrong. We thought that was a great place to start.

We also thought banks wouldn’t want to take on a risky advance product, so we created essentially the smallest-dollar salary advance system anywhere in the country. There are $34 billion a year in overdraft fees but the average purchase that triggers an overdraft fee is just $20. To avoid this, you can get a credit card or a payday loan. There was nothing out there that just said, I need to get gas, groceries, or go to the movies. Dave users really like that they’ve been able to tap $75 when they need to. This functionality has lead us to be the most reviewed fintech app with over 200,000 reviews. It’s been a differentiator.

Becoming a user’s primary bank account

As great as it’s been working with firms like Plaid to connect users’ existing accounts, data aggregation is still not perfect. We don’t ever want to let a user down. Giving our users bank accounts gives them real time transactions and we can rely on our own data. It’s a 100 percent better experience if you bank with Dave.

We’re going to be looking at how many people use us as their main product. I think the market’s been missing a challenger bank where everyone sets up their own direct deposit. We took a page out of Credit Karma’s playbook. You can use Dave for free, try it, and get value out of it. If you ever convert into a checking account in your life, it’s a win for us. We love the notion of Dave as a try before you drive model.

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