Loopt, one of the early location-based services, is announcing that it has been bought by Green Dot Corp ., a provider of retailer pre-paid cards which will use Loopt to develop mobile wallet and payment services. Green Dot is paying $43.4 million in cash for Loopt with the deal expected to close by the first quarter of this year.
The sale of Loopt leads to another exit for a location-based company following the acquisitions of Pelago, WHERE and the team behind Gowalla. Loopt launched in 2005 by Stanford undergraduate Sam Altman, who went on to raise $17 million from Sequoia and NEA. The service was an early pioneer in helping friends find each other through location tracking. It later helped users find better local deals and get tips on venues.
Green Dot will use Loopt for a number of things including improving customer acquisition and retention of its prepaid debit cards and drive adoption of new banking and payment products. It’s also going to help Green Dot become a player in the mobile wallet and rewards market for retailers. Loopt also holds some patents for location-based mobile marketing and messaging that Green Dot can use.
“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,” said Steve Streit, Chairman and CEO of Green Dot, in a statement. “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.”
Here’s what Loopt co-founder and CEO Altman said: “It’s been exhilarating to see mobile become such a critical part of our collective daily lives. 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. My team and I look forward to being part of this transformation and are eager to bring cutting edge mobile banking and payment solutions to Green Dot’s retail partners and Green Dot’s millions of current and future customers.”
Again, it’s showing that location-based services are having a hard time making it on their own. But I think it also shows that bigger companies are realizing the value of location and are looking to innovators who can help them get closer to the ground and use local context to help improve their products. That’s happening with eBay’s pick-up of WHERE, Groupon’s purchase of Pelago and Facebook’s buy of the people behind Gowalla. Location-based services are still trying to break into the mainstream in a lot of ways but while the companies pushing the edge are getting acquired, I think we’ll see a lot of these services live on in bigger ways down the line.