The Los Angeles-based company got caught up in the waves rocking the world of money-losing growth companies this year after it went public in January. But Dave is not capsizing, despite a staggering 97% decline in its shares through Nov. 18, Wilk said.
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Shares jumped as much as 13% on Monday and closed 7.9% higher.
“We’re trying to dispel the myth of, ‘Hey, this company does not have enough money to make it through,'” Wilk said. “We think that couldn’t be further from the truth.”
Few companies embody fintech’s rise and fall as much as JPMorgan Chase and Wells Fargo. Co-founded by Wilk in 2016, the company had celebrity backers and millions of users of its app, which targets a demographic ignored by mainstream banks and relies on subscriptions and tips instead of overdraft fees., one of the better-known members of a new breed of digital banking providers taking on the likes of
Dave’s market capitalization soared to $5.7 billion in February before collapsing as the Federal Reserve began its most aggressive series of rate increases in decades. The moves forced an abrupt shift in investor preference to profits over the previous growth-at-any cost mandate and has rivals, including bigger fintech Chime, staying private for longer to avoid Dave’s fate.
“If you told me that only a few months later, we’d be worth $100 million, I wouldn’t have believed you,” Wilk said. “It’s tough to see your stock price represent such a low amount and its distance from what it would be as a private company.”
The shift in fortunes, which hit most of the companies that took the special purpose acquisition company route to going public recently, has turned his job into a “pressure cooker,” Wilk said. That’s at least partly because it has cratered the stock compensation of Dave’s 300 or so employees, Wilk said.
In response, Wilk has accelerated plans to hit profitability by lowering customer acquisition costs while giving users new ways to earn money on side gigs including paid surveys.
The company said earlier this month thatand loans on its cash advance product rose 25% to $757 million. While revenue climbed 41% to $56.8 million, the company’s losses widened to $47.5 million from $7.9 million a year earlier.
Dave has $225 million in cash and short-term holdings as of Sept. 30, which Wilk says is enough to fund operations until they are generating profits.
“We expect one more year of burn and we should be able to become run-rate profitable probably at the end of next year,” Wilk said.
“We’ve got to get through this winter and prove we have enough money to make it and still grow,” Wilk said. “We’re alive and kicking, and we’re still out here doing innovative stuff.”