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Each week I’ll take a look at the hottest fintech news from the previous week.

Analysis

This will include everything from funding rounds to trends to analysis of a particular space to hot takes on a particular company or phenomenon.

There’s a lot of fintech news out there, and it’s my job to stay on top of it—and make sense of it—so you stay informed.

Mary AnnJust before the collapse of Silicon Valley Bank, I spoke with Jason Wilk, founder and CEO of neobank Dave, about the company’s business.

Investors

I was intrigued because the bank which counted Mark Cuban as one of its investors as a private company took what some might argue was a backwards path to becoming a bank.

Rather than start offering control and savings, it worked there. And that strategy seems to have paid off for the fintech company, which went public in January 2022.

Revenue

It recently reported 45% higher GAAP revenue of $59.6 million for the fourth quarter of 2022, up 45% year-over-year.

Here are excerpts of my interview with Wilk, edited for brevity and clarity.

JW: This is a tough spot for growth companies that may have access to more capital to eventually raise because the cost of capital is much more expensive because of interest rates.

That’s one of the reasons why our stock has fallen so much given that we’re not yet profitable, although we’re getting close.

Earnings

The benefit of higher interest rates for customers is that they can earn higher interest on savings and deposits.

Also benefits us as we can earn extra with higher rates.

But overall, I would say that the highest interest rate environment is more of a negative than a positive for business.

Last year we were off 8 to 10 quarters. We are now 4 to 6 quarters away from when we expect the company to be profitable.

We’ve been before in 2018 and 2019, so we’ve been there before.

Future Plan

We have added enough staff to build our future plan and have 1.9 million monthly performing members to Dave.

We need to acquire 2.2 million to 2.4 million customers to break even. We do not need to raise capital or other liquidity.

Our main feature that has disrupted overdraft fees is our Extra Cash product, which allows people to borrow small amounts of money.

Now get a cash advance of up to $500 [this limit was increased from $250 to $500 last summer) with up to 14 days to pay. back, with no late fees and no interest.

Then in 2020, during the pandemic, the government was giving out a lot of free money through stimulus dollars.

So there was less need for it and our marketing message was less resonant during that time.

That’s why we’ve increased the trade by about 26% in 2021 and really kicked things off as things are getting back closer to normal.

You recently launched banking services. how it goes?

Dave focused on the extra cash product, but then our most requested feature is that people wanted to bank with Dave.

So at the end of 2021 we launched our own checking account and from the second and third quarter of 2022.

It went so well that we decided to become a full-fledged bank and give a checking account to every customer, and now every new and existing member is a bank member.

And with this broader expansion and now that every customer has a card, we’ve been able to grow the banking business by 90% year-on-year.

Sources: Techcrunch | beamstart