Banking app Dave partnered with investment company Victory Park Capital to go public through a special-purpose acquisition company (SPAC), as it looks to cash in on increased user demand for financial services spurred by Covid-19 (coronavirus).

In a statement, the pair revealed plans to establish the SPAC in H2 which will enable the app to become a publicly traded entity, with a target of reaching a market value of approximately $4 billion.

SPACs are a popular way for smaller companies to go public. They operate as shell businesses, with no operations of their own, and are primarily used as investment vehicles to raise funds for the purpose of acquiring an existing company.

As part of the deal, Dave and Victory Park Capital secured a $210 million investment led by investment company Tiger Global Management, with other backers including Wellington Management and Corbin Capital Partners.

Dave’s proposed listing is designed to target new products and to continue the “rapid scale” of its banking platform.

The app launched in 2017 in the US, providing services to help users “avoid billions of dollars in overdraft fees charged by traditional banks”, including financial tips, overdraft protection and building credit.

App Annie estimated global time spent on finance apps grew 45 per cent year-over-year in 2020, excluding China, driven by lockdowns imposed to confine the global pandemic.