When Dave hit the app store in 2017, the company was positioned as the little guy in the David and Goliath story — the inspiration for its name, after all — a startup out to disrupt the $30 billion world of overdraft fees levied by banks. Less than four years later, CEO Jason Wilk has grown the company into a Goliath of its own.

Dave, now the third most-valued challenger bank in the U.S. (tied with Upgrade), didn't enter the market touting a high annual percentage yield or low minimums. It didn't enter the market as a banking option at all: Instead, Wilk positioned the app as a financial health tool that could save its users from crushing overdraft fees.

When Dave began its push into banking in the summer of 2019, it had 3.5 million registered users. A year and a half later, the company says they've eclipsed 8 million total users, 1 million of whom now bank with Dave too. As the pandemic has changed people's relationships with brick-and-mortar financial institutions, Dave has found a way to move the company not only further into the space of traditional financial products, but into a position as the challenger bank that could best serve customers who are taking advantage of the gig economy's less traditional pay structures.

In an interview with Protocol, Wilk laid out his plans for the company's next wave of financial products and how the shifts in user behavior have colored them, explaining how the company is leaning into the gig economy to try to make banking look different altogether.

This interview has been edited and condensed for clarity.

The personal finance-focused app Dave of a couple years ago looks a lot different than the challenger bank Dave of today. How much of the roadmap was already in place, and how much of it was an adjustment to a different fintech environment?

If you look back to our seed deck from our original first round, we have everything in there except for Side Hustle [Dave's job marketplace for part-time work]. And the idea was that we wanted to put the $30 billion a year of overdraft fees back in people's pockets. That was version one of the product, to really start to build relationships with customers. That product was the original Dave, which forecasted upcoming bills, alerted you if you had a low balance and you're at risk of an overdraft, and we give you access to a hundred dollars of free overdraft to put into your pocket to afford things like gas and groceries.

Through the data, we found that people were working in a lot of various gig economy companies, specifically in the rideshare space. We felt, with the explosion of the gig economy, that expanding those opportunities to be in everything from grocery delivery to work-from-home opportunities was a really cool way for our users to make more money and another way to really improve their financial health. I would say that's probably the only thing that was not on the roadmap. Banking was certainly something we had aspirations for early. I think we got there faster than we initially thought in original vision, but here we are today, three years later, with a couple million people signed up for that waitlist on banking and over 7 million people in the app.

What do you think accelerated that timeline?

I think we saw that it was possible. There were tools that started coming out that really started to connect the dots between us and the major banks. When we first started the company, there really was not a lot of that connectivity. The challenger banks that were in this space were still relatively small, and so we weren't taking it as seriously as a business model yet. But with the rise of some of the more popular challengers now, we felt there was no better time to get into this space. Our users are asking for it. We proved that with a high intent off this waitlist and really wanted to accelerate our entrance into this newer area.

On banking in particular, you projected 1 million users by the year's end. In a year with so much noise among projections and data, how did you source that number?

As we've seen with COVID, there are a few industries that have accelerated right now during this pandemic, and digital banking is certainly one of those. The idea that you're going to walk into a bank and open up a new checking account at this point seems like a pretty antiquated concept.

Digital banking, being able to download an app, set up a checking account and start spending day one is something that is a real high pain point. We talked a lot about how we started out with overdraft protection and financial management because those are top-of-mind pain points. But if you are in need of a great mobile banking experience and you can't go to your community bank, that does become a financial challenge.

We've done an incredible job with customer acquisition. We've been able to build up a base of millions with a tenth of the funding of the other larger players, yet have been able to keep pace as one of the top three players in the industry. As we get people into banking, as we get people in these longer-term relationships with us, our ability to start to reinvent other traditional financial products gives us a pretty big opportunity.

What kinds of products are you looking at reinventing?

Anything from credit to savings — you name it. If your cost to acquire a customer is around $10, and effectively you're paying the customer back in four to five months, that allows you to ship products that are typically expensive for competitors to acquire. Let's say a credit card, for example: It costs an average of $200 in [customer acquisition cost] for a credit card company. But if Dave doesn't actually have that CAC, we already have the relationship with the user, we can start to create various interesting ways to help customers and pass on those cost savings to users.

The nature of the gig economy lends itself to varied income levels. How does Dave's algorithm around overdraft alerts contend with that kind of sporadic income, especially within the context of the pandemic?

From really early on, the gig economy was a big adopter of the product. It made a lot of sense. If you're working with those sporadic paychecks, you really do care about what bills are coming up, about how much money you have to spend until the next payment comes in and when to cash out from your gig economy job.

We had to pretty quickly build that into our machine learning so we could give people overdraft protection who were working in the gig economy. We're really working now on expanding as we're seeing gig economy workers and our salaried workers looking for new opportunities with the shutdown and increase in job loss. We're rolling out Side Hustle to be more robust over the next quarter or two.

You mentioned Side Hustle is a deviation from the original vision of the company; how has it developed into something that meshes with a consumer finance product?

When it started out, we were reaching out to companies on our own. And now we're seeing that companies are reaching out to us. It really has a life of its own, and it is now an actual job board. It's really something we felt was surprising for customers given your bank generally does not help you try and earn more money. We felt like that was a really unique angle. What bank gives you free access to overdraft and helps you find work and helps you build credit?

Through the pandemic, we've seen triple-digit improvement in engagement on that product. Specifically, we started out pre-pandemic only offering jobs at places that were out-of-home. You had to actually get in a car and do some kind of delivery or do some sort of handiwork. Now we include a lot of at-home opportunities, everything from taking surveys to online tutoring. That really has helped us expand as people are looking for more money.

Have there been any moves you've seen your competitors make that have influenced the direction of your business?

When we launched the company, there was certainly no shortage of challenger banks out there: just no one had really gotten to scale. To me, one of the big reasons why was that they're really all touting, "This is a no-fee account, no overdraft fees," but the reality was that big banks were putting people in a hard position because they're making $30 billion on fees. If you're a challenger bank and you don't allow for overdraft, you're also putting people in a really tough spot because their card doesn't get turned off at the gas station or at the restaurant if they're out of funds. So we felt the best way to build the next challenger was to reinvent overdraft, because ultimately it's a very useful concept for people that need access to buy everyday essentials. They just hate the super high fees associated with it.

So we've reinvented it by letting people access up to a hundred bucks and doing this pay-what-you-think-is-fair model. We now align ourselves with a customer, we put them in a better position, and they get access to this amazing product that does not actually cost them any money depending on how to use it. We've issued 30 million of these overdrafts at this point, and now we're seeing a shift to the challengers trying to offer a similar feature.

The pay-what-you-think model seems like it would be a tough one for you to navigate from a data perspective. In recouping what are effectively 30 million overdraft loans, is that model a revenue stream that you can consistently plan around?

We can reasonably forecast it, given the sheer magnitude of how many times that we've issued the product. But we view this is not as a way to drive as much revenue as possible. This is really a way to put more money back in people's pockets and build a relationship. That's ultimately why we thought it made a lot of sense. Our eyes are laser-focused on interchange and the traditional products from here on out, and our subscription fee is the primary revenue driver there. And there will be consistent growth of the silos of revenue as we build up our partnerships with the various job providers.

Dave's demographics tend to skew younger, and it seems like you're catering to populations that are traditionally underserved by larger banks. As you're expanding the product suite, are you also going to be targeting more traditional banking customers?

Our base is the customer who really wants to really improve their financial health. They want to get ahead in life. They're tired of paying fees. They're looking to find second sources of income. We think that that really spans the universe of a younger user all the way up to someone in the later stages of their life. We naturally attract a younger customer right now, just given the prime rates that we advertise. But as [our ads appear in] things like out-of-home and television, you see that age demo start to start to creep up. But it's not necessarily the underserved or the under-banked. We want to be the real champion of consumer banking and financial health in this country, and that happens to be like 180 million Americans.

What's the next step then, to reach those 180 million Americans in 2021?

I think for us on the near-term roadmap is savings. Savings is a natural extension to banking. We're going to try to come out with something that is truly unique that really enhances people's ability to save. Ultimately, when you scan our user base, almost every user has a checking account at the institution they use with a median savings of like $5. Just because you offer the tool doesn't necessarily mean people use it or know how to use it. And we think that there's a ton of innovation that can be brought to the table around intelligence and savings.

I think it's a data problem: The same way that I was frustrated as a college student and young entrepreneur never knowing how much money I could spend until I got paid next, the same frustration exists around savings. I don't think people really know how much they can safely set aside, and that's what leads to a lot of anxiety around it, the constant back and forth transfers between savings and checking. We need to help people really visualize what is available to save.