Location-based service provider Loopt has been acquired by the Green Dot Corporation for 43.4 million in cash,
including $9.8 million set aside for retention of key Loopt employees. The acquisition by the financial services company highlights continuing consolidation in the LBS space, with Foursquare remaining
as the major independent player in the category. Last year, former Loopt competitor Gowalla was snapped up by Facebook.
Green Dot, which offers prepaid debit cards and other banking products,
said the deal would help the company reach new consumers and expand into providing mobile wallets, rewards and payment solutions at retailers nationwide. It also noted Loopt holds several patents
related to location-based mobile marketing.
"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.
Founded in 2005, Loopt had received about $17 million in venture funding to date from investors including New Enterprise Associates and Y Combinator. Last
year, Loopt added real-time deals from Groupon to its own Reward Alterts deals program in a bid at co-opetition with the group-buying powerhouse.
The Green Dot transaction is expected to close
by the end of the first quarter, whereupon Loopt’s Silicon Valley headquarters will become Green Dot’s hub for mobile technology and product development.
Dot expects this
transaction will result in approximately $14 million of incremental operating expenses during the remainder of this year which will reduce its previously stated 2012 adjusted EBITDA accordingly.