Surprise! Green Dot buys Loopt for mobile financial services
Green Dot says it will pay a total of $43.4 million for Loopt, including $9.8 million, which will be set aside "as a retention pool" for key Loopt workers.
Well, this is an odd one.
Green Dot, a company that provides prepaid debit cards to consumers, has acquired mobile location-based application developer Loopt for $43.4 million, the companies announced today. The deal is an all-cash transaction, and will include Green Dot setting aside $9.8 million as a "retention pool" to ensure key Loopt employees stay put.
Though Green Dot's Loopt acquisition might not make sense at first glance, considering how different the companies are, it appears Green Dot has bought the firm for its mobile-development expertise. In a statement celebrating the acquisition, Loopt co-founder and CEO Sam Altman said his company will be developing "mobile banking and payment solutions to Green Dot's retail partners...and customers."
For Loopt, the Green Dot acquisition marks an end to the company's long-sought-after goal of establishing relevance in the mobile space. The company's app started out as a service to help folks find friends and family nearby, but after more-popular location-based apps launched, its popularity waned. Loopt's latest move involved trying to capitalize on the daily-deals craze by offering users nearby offers.
So, what does the future hold for Loopt? Speaking to The Wall Street Journal in an interview published today, Altman said the Loopt app will eventually be discontinued, but "many" of the app's features will be preserved in new products for Green Dot.
Green Dot hopes to close its Loopt acquisition by the end of this month. It has taken an additional $14 million in operating expenses to account for the deal.