VPC Impact Acquisition Holdings III, Inc.
PROPOSED BUSINESS COMBINATION: Dave
ENTERPRISE VALUE: $3.563 billion
ANTICIPATED SYMBOL: DAVE
VPC Impact Acquisition Holdings III, Inc. proposes to combine with Dave, a banking app.
Launched in 2017 as an app to help Americans avoid billions of dollars in overdraft fees charged by traditional banks, Dave is now a financial platform helping 10 million customers with banking, financial insights, overdraft protection, building credit and finding side gigs. Dave aims to help foster the financial health of its members while also giving back to the community, having pledged over 13 million meals to Feeding America since launch. To date, Dave estimates that it has helped customers avoid nearly $1 billion in overdraft fees through its flagship feature, ExtraCash, and earn over $200 million in income through its gig-economy job board, Side Hustle.
In December 2020, the company launched Dave Banking, a spending account and debit card with no monthly fees, which has already accumulated more than 1.3 million members.
Dave Highlights
- Highly differentiated, impactful platform provides ease of access, speed-to-value, and data and tech capabilities with modest user adoption costs
- Strong brand affinity with the highest favorability rating in its industry
- Explicit focus on building community and promoting financial inclusion and education
- Positioned to rapidly capture share in an underpenetrated and growing market of more than 150 million people currently underserved by the traditional banking system through significant marketing investment, new product development and M&A
- Strong delivery against platform vision with Average Revenue per User (“ARPU”) increasing dramatically as users connect to Dave Bank
- Strong unit economics and high-impact products are significantly revenue-generative
- Highly experienced management team supported by world-class investor base
SUBSEQUENT EVENT – 8-K Link
- On August 17, 2021, VPC Impact Acquisition Holdings III, Inc., announced that it has entered into an amendment to the PIPE subscription agreement it previously entered into with Alameda Research Ventures LLC.
- The amendment calls for a $15 million PIPE pre-funding, which will be facilitated through the issuance of a promissory note by Dave to Alameda Research.
- Dave’s obligations to repay the principal amount of such promissory note would be discharged through the issuance to Alameda Research of 1.5 million shares of VPCC at the closing of the business combination.
TRANSACTION
- Upon completion of the transaction, the combined company is expected to have a fully-diluted equity value on a pro forma basis of approximately $4 billion, assuming no redemptions.
- It is expected to result in over $375 million of cash on the combined company’s balance sheet, reflecting a contribution of up to $254 million of cash held in VPCC’s trust account (assuming none of VPCC’s stockholders redeem their shares) and a $210 million concurrent private placement (PIPE) led by Tiger Global Management with additional participation from Wellington Management and Corbin Capital Partners.
PIPE
- $210 million – 21,000,000 shares of Parent Class A Common Stock in a private placement for $10.00 per share
- Led by Tiger Global Management with additional participation from Wellington Management and Corbin Capital Partners.
REPURCHASE AGREEMENT
- Parent has agreed to repurchase a certain number of shares of Parent Common Stock from the Selling Holders (including shares of Parent Class V Common Stock issued to Mr. Wilk in connection with the Transactions), at a purchase price of $10.00 per share, on the business day immediately following the effective time of the Second Merger (the “Repurchase”).
- The Repurchase is contingent on the amount of Parent Cash being in excess of $300 million.
- If Parent Cash exceeds $300 million, the number of shares of Parent Common Stock subject to the Repurchase will be equal to the amount by which Parent Cash exceed $300 million (the “Aggregate Repurchase Price”), divided by $10.00 (provided that in no event will the Aggregate Repurchase Price exceed $60 million).
- 80% of the number of shares of Parent Common Stock subject to the Repurchase will be allocated to Mr. Wilk, with Mr. Beilman allocated the remaining 20%.
LOCKUP
in respect of the Company Stockholders,
- six (6) months following the Closing (the “Company Stockholders Lock-Up”)
in respect of the Founder Holders, the earlier of:
- (x) twelve 12 months following the Closing,
- (y) the date the Parent Class A Common Stock achieves a trading price of at least $12.00 as determined by reference to the volume-weighted average price achieved for at least 20 trading days within any 30 consecutive trading days for any thirty (30)-trading day period commencing on or after on or after the 150-day anniversary of the Closing, and
- (z) the date on which Parent completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction resulting in all of the Parent Stockholders having the right to exchange their shares of Parent Common Stock for cash, securities or other property (the “Founder Holders Lock-Up”).
SPONSOR SUPPORT AGREEMENT AND EARNOUT
- Surrender to Parent, on a pro rata basis, immediately prior to the consummation of the Mergers and for no consideration, up to 951,622 shares of Parent’s Class B common stock, par value $0.0001 per share (“Parent Class B Common Stock”), in the event that the number of shares of Parent Class A Common Stock equal to
- (x) the shares of Parent Class A Common Stock held by the Parent Stockholders (other than the Founder Holders) that are redeemed in connection with the Transactions minus
- (y) the shares of Parent Class A Common Stock purchased by Sponsor or one or more of its affiliates or certain related parties prior to the Closing in connection with an alternative financing permitted by the Merger Agreement (which purchases (if any) shall be made at $10.00 per share and on terms substantially the same as the terms of the Subscription Agreements), represents greater than 20% of the shares of Parent Class A Common Stock held by the Parent Stockholders as of the date of the Merger Agreement;
- Subject to potential forfeiture, on a pro rata basis, 1,586,037 shares of Parent Class A Common Stock (the “Founder Holder Earnout Shares”) in accordance with the terms of the Merger Agreement, such that 100% of the Founder Holder Earnout Shares will be forfeited in the event that
- the Parent Class A Common Stock does not achieve a trading price of at least $12.50 per share,
- 40% of Sponsor Earnout Shares will be forfeited in the event that the Parent Class A Common Stock does not achieve a trading price of at least $15.00 per share prior to the fifth (5th) anniversary of the Closing
NOTABLE CONDITIONS TO CLOSING
- Parent having at least $210,000,000 in available cash in the Trust Account, after taking into account payments required to satisfy redemptions of Parent Class A Common Stock by Parent Stockholders (if any), and from the proceeds in connection with the Private Placement (and any alternative financing arranged by Parent and the Company, including in the event the Private Placement becomes unavailable) (such condition, the “Minimum Cash Condition”).
NOTABLE CONDITIONS TO TERMINATION
- By either Parent or the Company, if the consummation of the Mergers has not occurred on or prior to January 31, 2022 (the “Outside Date”)
ADVISORS
- Centerview Partners LLC is serving as exclusive financial advisor
- Orrick, Herrington & Sutcliffe LLP is serving as legal advisor to Dave.
- Citigroup and Jefferies are serving as capital markets advisors to VPCC and co-placement agents on the PIPE.
- White & Case LLP is serving as legal advisor to VPCC.
MANAGEMENT & BOARD
Executive Officers
Brendan Carroll, 43
Director and Co-Chief Executive Officer
Mr. Carroll is a Senior Partner at VPC, which he co-founded in 2007. He is responsible for strategic initiatives and firm operations in addition to sourcing, evaluating and executing investment opportunities. Mr. Carroll also oversees marketing, fundraising, business development and investor relations for the firm. He is a member of the firm’s Senior Leadership Team and Investment Committee. Mr. Carroll serves as member of the board of directors of VPC portfolio company, johnnie-O. Previously, as a member of the Solutions Group at Magnetar Capital, Mr. Carroll specialized in direct financings to lower middle market companies. He has held various investment banking positions at William Blair and Robertson Stephens, specializing in corporate finance and mergers and acquisitions. Mr. Carroll received a B.A. with honors in government from Georgetown University and an MBA from Harvard Business School. He speaks frequently on debt and private equity investing issues and has served as a guest lecturer and panelist at the University of Chicago’s Booth Global School of Business, Northwestern University’s Kellogg School of Management and Harvard Business School. Mr. Carroll is a member of the Finance Council of the Archdiocese of Chicago and Loyola Press and previously served on the Board of Regents at Georgetown University. He is also a director on the board of the Ann & Robert H. Lurie Children’s Hospital of Chicago and is also a member of the board’s Finance Committee.
Gordon Watson, 42
Co-Chief Executive Officer
Mr. Watson joined VPC in 2014 and is currently a Partner. Gordon is a member of VPC’s investment committee and helps lead our Fintech investing team. Gordon is the Investment Manager for VPC Specialty Lending Investments PLC (LSE: VSL), a VPC managed UK publicly listed investment trust focused on opportunities in the Fintech market. Gordon is also the president and chief operating officer of VPC Impact Acquisition Holdings, and serves on the board of directors of VPC Impact Acquisition Holdings. Previously, Gordon was a portfolio manager focused on distressed debt at GLG Partners, a London-based $31 billion multi-strategy hedge fund that concentrates on a diverse range of alternative investments. He joined GLG when it purchased Ore Hill Partners, a credit focused hedge fund where Gordon was a partner.
Carly Altieri, 32
Chief Financial Officer
Ms. Altieri joined VPC in 2018 and currently is a Fund Controller. Carly oversees VPC’s fund accounting team in the execution of accounting, finance, tax, audit, reporting and treasury related activities for the VPC funds. Ms. Altieri joined VPC from Northern Trust Hedge Fund Services, where she was a Vice President responsible for the fund accounting team supporting hedge fund clients. Prior to Northern Trust, she was an officer at JPMorgan Chase, where she worked in Private Equity and Real Estate Services. Ms. Altieri started her career in audit at KPMG LLP, specializing in the financial services industry. Ms. Altieri received a B.S. in accountancy and finance from Marquette University. She is a Certified Public Accountant (inactive).
Board of Directors
John Martin, 60
Chairman and Director
Mr. Martin maintains over thirty years of investment experience and is a Senior Partner at VPC. Martin served as managing partner and co-CEO of Antares Capital, LP, a private debt credit manager, until May 2019. He was a founding partner of the original Antares Capital in 1996, a startup business that provided acquisition financing capital to the portfolio companies of private equity firms across North America. Over the course of nine years, Antares grew to become one of the largest providers of acquisition capital to private equity sponsors in the middle market. Following the firm’s acquisition by GE Capital in 2005, Martin became President and CEO of the newly branded GE Antares Capital and helped to direct the strategic vision of the business. In addition, he presided over numerous acquisitions and divestitures, including the sale of the firm to The Canada Pension Plan Investment Board (“CPPIB”) for $12 billion in August 2015. Subsequently, Antares went on to raise more than $6.5 billion in the CLO market from a global investor base comprised of banks, pension funds, insurance companies and asset managers. Mr. Martin is currently the chairman and chief executive officer of VPC Impact Acquisition Holdings, and serves on the board of directors of VPC Impact Acquisition Holdings. Following the acquisition by CPPIB, Martin sat on the Antares Investment Committee throughout his tenure at the company and was a member of the board of directors. At the time of his retirement, the firm’s assets under management totaled more than $24 billion.
Peter Offenhauser, 45
Director
Mr. Offenhauser is a partner at Northern Pacific Group. Prior to joining Northern Pacific Group, Mr. Offenhauser was a principal at Stone Arch Capital. Prior to Stone Arch, Mr. Offenhauser spent four years as a senior associate with Churchill Equity Partners. Mr. Offenhauser also worked at Ferrer Freeman & Company, a Greenwich, CT-based growth equity investment firm focused on healthcare-related investments. Mr. Offenhauser began his career as an Analyst at Goldsmith, Agio, Helms & Lynner (now Lazard) and earned a B.S. in Accounting and Economics, with honors, from the University of Minnesota, as well as an M.B.A., with honors, from Columbia University.
Kurt Summers, 41
Director
Mr. Summers has twenty years of experience in both private and public sector finance. Mr. Summers is currently a Senior Advisor at Bridgewater Associates, Blackstone and Ullico, where he provides insight and strategic direction around various investment opportunities and existing holdings, and a member of the Board of Directors of VPC Impact Acquisition Holdings. From 2014 to 2019, Mr. Summers served as Treasurer of the City of Chicago, where he managed the city’s more than $8 billion investment portfolio and served as a trustee or fiduciary of five local pension boards with nearly $25 billion under management. As Treasurer of Chicago, Mr. Summers and his team more than tripled the returns on the city’s portfolio, which now generates more than $100 million of incremental revenue to Chicago’s taxpayers, bondholders and other stakeholders each year. From 2012 to 2014, Mr. Summers served as Senior Vice President at Grosvenor Capital Management where he helped lead the firm’s strategy and business development efforts and served as a member of the Office of the Chairman. From 2010 to 2012, Mr. Summers served as Chief of Staff to the Cook County Board President where he was the architect of a turnaround of the second largest county in the country. From 2009 to 2010, Mr. Summers served as Managing Director at Ryan Specialty Group, an international specialty insurance organization. Mr. Summers began his career at McKinsey & Company, a preeminent global strategy-consulting firm, and also worked as an investment banker at Goldman Sachs. Mr. Summers received a BSBA in Finance and International Business with high honors from Washington University and an MBA from Harvard Business School.
Janet Kloppenburg, 65
Director
Ms. Kloppenburg has served since 2002 as President of JJK Research Associates, a consulting and advisory services firm that provides strategic analysis focused on scaling omni channel operations and delivering profitability across all channels. From 1987 to 2002, Ms. Kloppenburg was a Managing Director at Robertson, Stephens & Co., where she created and managed the firm’s consumer practice as a member of the Executive Committee and managed the company’s NYC headquarters. There Ms. Kloppenburg was instrumental in taking numerous companies public, including Ann Taylor, Men’s Wearhouse, Michaels Stores and Restoration Hardware. Ms. Kloppenburg’s areas of expertise include omnichannel strategy, consumer trend analysis, and ecommerce and social media marketing, among others. Ms. Kloppenburg currently serves on the Board of Directors of Show Me Your Mumu, Inc., White + Warren, Inc. and the Artist Association of Nantucket. Ms. Kloppenburg received an M.B.A. from Boston University and a B.S. in Business from the University of Vermont.