Fintech platform Dave has announced that it will buy a convertible promissory note worth $100 million from FTX at the price of $71 million. The banking app plans to part ways with the FTX exchange, which is fighting for its survival amid bankruptcy and all the legal woes.
- Banking app Dave will buy back $100 million worth of convertible promissory note for $71 million.
- The fall of FTX came as a surprise for Dave after partnering with the exchange in March 2022.
- Dave continues to focus on the growth and innovation of its financial services.
As per details, the convertible promissory note was previously issued to FTX Ventures. It was the venture capital of the FTX exchange that went bankrupt. In the business world, a convertible promissory note represents a loan that can be converted into a share of the company later.
Nonetheless, the move still requires approval from a bankruptcy court. There is a court hearing scheduled for January 25, 2024, which could decide the legal standing of the move.
The founder and CEO of Dave, Jason Wilk said,
“We believe the transaction represents a compelling capital allocation opportunity for Dave. Accounting for the payment, we remain confident that we have sufficient capital to execute on our growth plan without the need to raise additional equity capital.”
Dave Looks to Grow and Innovate
Dave is a widely known company in the fintech world. It has continued to grow over the years to make a name for itself. Dave offers financial services through its mobile application. These services include savings accounts, cash advances, and spending accounts.
The platform has reportedly raised over $536 million in funding during its nine rounds, with the most recent funding round securing a $50 million debit emission. The last funding round was held in September 2023.
Back in March 2022, Dave partnered with the FTX Exchange. The partnership was carried out to integrate crypto payments on the banking platform. However, the bankruptcy and fall of FTX came as a shock to Dave, and the platform has refrained from diving into the crypto space.
On the other hand, Dave chose to focus on the company’s core financial services. The platform introduced the AI chatbot, DaveGPT at the end of last year to improve its customer service. Nonetheless, the platform did experience a setback due to the unexpected crash of FTX.
Throughout its bankruptcy process, FTX debtors have urged the platform to liquidate the company’s assets and repay creditors. The bankruptcy court has approved several sales of the company’s assets to dissolve this matter.
So far, around $7 billion in assets have been recovered out of $8.7 billion. The disgraced CEO of FTX, Sam Bankman-Fried, was found guilty of multiple charges in the court hearings and will be sentenced on March 28, 2024.