Dave Set to Acquire $100M Convertible Note from Bankrupt Crypto Exchange FTX Ventures
Summary:
Digital finance company Dave plans to acquire a $100 million convertible promissory note from FTX Ventures, the bankrupt cryptocurrency exchange's investment division, for a discounted price of $71 million, pending bankruptcy court approval. Dave offers a variety of financial services via a mobile app and has raised $536.3 million in total funding. The company had partnered with FTX in March 2022, which also involved a $100 million investment from FTX Ventures. Post FTX's bankruptcy in November 2022, several of their transactions were reclaimed by the court. The founder of FTX, Sam Bankman-Fried, was found guilty of several fraud charges and his sentencing is set for March 28, 2024.
Digital finance company Dave has disclosed plans to secure a $100 million convertible promissory note originally issued to FTX Ventures, an investment division of the now insolvent cryptocurrency exchange, FTX. This plan involves buying the note for a lesser price of $71 million, subject to approval from a bankruptcy court; a court hearing is set for January 25. Startups typically employ a convertible promissory note, which is essentially a loan that can later be converted into company stock.
Dave offers a variety of financial services through a mobile app, such as saving and spending accounts and cash advancements. Company information available on Crunchbase reveals that Dave has raised an impressive $536.3 million over nine rounds of funding. Most recently, the company gathered $50 million through a debit issuance in September 2023.
In March 2022, Dave formed a business alliance with FTX to enable cryptocurrency payments on its platform. This partnership also involved a generous $100 million investment from FTX Ventures. However, several transactions, payouts, and contributions made by FTX and its subsidiaries in the months leading up to their bankruptcy in November 2022 were repossessed by the bankruptcy court.
On December 19, FTX debtors publicized a comprehensive settlement with the Joint Official Liquidators for FTX's Bahamian branch, a critical process of the bankruptcy proceedings. Both companies labeled this agreement as a groundbreaking and mutually beneficial resolution centered on cross-border legal matters.
Since FTX's insolvency in November 2022, requests to sell the company's assets to pay back its creditors have been lodged multiple times. The court has given the green light to several sales, including the transfer of LedgerX, the sale of trust assets valued at $873 million, the disposal of digital assets valued at $3.4 billion, and an arrangement that settles the differences between FTX and Genesis.
From the estimated $8.7 billion in misappropriated client money, assets worth at least $7 billion have been recovered. FTX's founder, Sam Bankman-Fried, was convicted of multiple charges, including two counts each of wire fraud and wire fraud conspiracy, and one count each of securities fraud, commodities fraud conspiracy, and money laundering conspiracy on November 2. His sentencing date is set for March 28, 2024.
Published At
1/5/2024 8:32:53 PM
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