If Jason Wilk's entrepreneurial superpower isn't starting companies, it's financing them. Wilk has founded four companies, amassing almost $200 million in financing between them. In his mid-20s, he became known for making an audacious pitch to Mark Cuban that led the billionaire Shark Tank star to back several of his endeavors--including his latest, Dave, a Los Angeles-based financial services firm.
While Wilk may have mastered VC, he's had a fraught relationship with another component of the financial system, traditional banks, for most of his life. He continually found himself paying overdraft fees, hundreds of them dating back to his high school days. Eventually the experience would help form the idea for Dave, which aims to help customers avoid similar difficulties.
Shortly after college, Wilk started two companies in quick succession, including one that made a nifty peel-and-stick whiteboard called WriteyBoard. At times during that period he needed to cap his salary at $30,000. "I was sleeping on people's couches and trying to make it work," he says. "And that came with needing more understanding of what bills we had coming up, and trying to stop overdraft fees before they happened."
In trying to improve his own financial health, Wilk encountered a system that, he says, punishes folks most in need of financial assistance. An average American pays more than $200 in overdraft fees a year--and fees disproportionately hit Black and Latino households. "Banking is supposed to be free in this country!" Wilk says. "Turns out it's one of the biggest expenses of people's lives."
The epiphany stayed with him, even after his ad-tech company, AllScreen, soared to profitability, and ranked No. 29 on the Inc. 5000 in 2015. After AllScreen was acquired for $85 million in 2015, the founders had money in their pockets--and Wilk still had his bone to pick with the U.S. banking system.
He says he looked at his co-founder, Paras Chitrakar, and said: "We don't have to be so mindful of every penny now. We can go bigger." Naturally the two, along with co-founder John Walanin, a former product lead at online-coupon startup Honey, went for banks. To create a friendly financial-analysis tool that would eventually evolve to include features of traditional banking for individuals, they sought a guy-next-door vibe, and named the venture accordingly: Dave.
The founders began the company in 2016 by offering anyone who signed up financial analysis to better predict when bills would hit--and head off overdraft fees. Dave would also float its customers up to $200 if they had a bill hit ahead of their regular paycheck. In 2020 it launched no-fee bank accounts, with no overdraft fees. (An account costs a subscription fee of $1 a month, and the company encourages users to "tip" after receiving any cash-advance, with a default of 10 percent, which often yields more profit than would a typical bank-loan interest rate.)
Perhaps it was fate that the establishment of Silicon Valley finance didn't quite jibe with Dave at the start. Wilk says that despite his past success attaining venture-capital funding, this time it proved more difficult. "Most VCs have never overdrafted," he says. Even his former backers took some convincing that it was a real problem. He says he and his co-founders had more than 120 meetings before finding a lead investor for its first major funding round.
Five years after launching Dave has 10 million members--1.5 million of whom pay for banking through the company, which makes most of its revenue through credit card interchange fees, as well as from referral fees through a gig-employment-finding tool called Side Hustle. The business had $122 million in revenue in 2020, and an astounding 28,972 percent three-year growth rate that earned it the No. 5 spot on the 2021 Inc. 5000.
Aside from revenue, the company measures its success in the prevention of consumer overdraft fees--$1 billion over the past five years, it says--and helping its customers make a combined $200 million in gig jobs they found through its platform. During the pandemic Dave expanded its recruiting, growing from 80 employees at the start of 2020 to more than 170, even while operating virtually. It is slated to go public (with the obvious ticker symbol, DAVE) via SPAC toward the end of 2021, after having signed its merger agreements with an acquisition company in June.
Growth has not come without problems. In 2020, a major third-party breach of an analytics contractor appeared to expose data of the app's entire user base, at the time 7.5 million people. While users' Social Security numbers were encrypted, a class-action suit accused the company of not alerting customers quickly enough about the breach, and critics charged that Dave collects more personal information than comparable services. The federal case was voluntarily dismissed in November 2020, while a proposed class-action alleging violation of the California Consumer Privacy Act is pending in the L.A. Superior Court. (Dave maintains that no financial information was taken and that it immediately "began an investigation, retained a leading cybersecurity firm, and notified law enforcement," according to a blog post.)
In another legal challenge, a coder named Zack Martinsek alleged that he was dismissed from his role as director of technology and compliance by the company, that his nearly 700,000 vested shares of stock were rescinded inappropriately, and that investors haven't been informed about this. Wilk said in a statement: "Despite Mr. Martinsek's unsubstantiated claims, his dispute with the company has been disclosed to all Dave investors, and the complaint itself is a matter of public record. Dave disputes the claims made by Mr. Martinsek in this matter."
Whatever the fallout from these issues, as Dave continues to grow look for the company to branch into other financial services for Americans who need financial help most. "Our target market is the 150 million Americans who cannot afford a $400 emergency," Wilk says. "These are the same customers who are paying a lot for credit, and who pay the majority of overdraft fees out there."