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March 09, 2012

Green Dot Expects to Acquire Loopt for $43.4 Million

By Ed Silverstein, TMCnet Contributor

Green Dot, a provider of banking solutions and prepaid debit cards, expects to acquire Loopt (News - Alert). The $43.4 million deal for the location-based services company is expected to close by the end of the 1Q of 2012.

The purchase still needs to meet various regulatory approvals. The $43.4 million total includes $9.8 million to be used as a “retention pool” for select Loopt employees, the company adds.

If it goes through as planned, Green Dot says it will see better customer acquisition and retention for its prepaid debit cards. It will also see new banking and payment products, the company adds, and Green Dot could offer mobile wallets, rewards and payment solutions at retailers. And after the deal, Loopt’s patents could be important assets in terms of mobile business.

"We believe that mobile phones have the potential to change the way people interact with their bank, control their money and pay for goods and services,” Steve Streit, chairman and CEO of Green Dot, said in a company press release. "Loopt has innovative mobile technology, market leading mobile programming capabilities and compelling intellectual property. Meanwhile, Green Dot has a large customer base, a robust enterprise-level financial services infrastructure and retail point-of-sale financial transaction capabilities deployed at major retailers nationwide. When Loopt’s assets are layered into Green Dot’s platform, we believe that a significant opportunity emerges for Green Dot to become a large-scale player in mobile technology solutions at the retail point of sale."

“As this technology truly reaches the masses, I believe we're going to see the banking and payments industry fundamentally reshaped in a way that’s better for everyone,” adds Loopt co-founder and CEO Sam Altman (News - Alert).

Green Dot’s staff in mobile technology and product development will locate at Loopt’s current headquarters in Mountain View, Calif.

Some of Loopt’s recent rivals have included Foursquare (News - Alert) and Gowalla, according to Mashable. Gowalla was acquired by Facebook (News - Alert) in December. “While Gowalla was initially launched to be a competitor to location-based Foursquare, it did not succeed in this initial venture, and instead crafted itself to be a mobile, location-based travel service that helps voyagers ‘check in’ wherever they happen to be to find out about what attractions and restaurants they are in close proximity to, including special, featured travel tips for many locations,” according to a December report from TMCnet’s Tracey E. Schelmetic.

Edited by Rich Steeves
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