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What do prepaid debit cards and location-based services (LBS) have in common? If a company called Green Dot is right, the answer is 'a lot more than you might think.'
The company, which is a major player in the prepaid debit card space, today announced that it has acquired mobile LBS startup Loopt for $43.4m in cash.
Loopt has been a pioneer in the LBS market, launching in 2005, well before the LBS market became hot. But it may have been too early, as upstarts like Foursquare, which launched in 2009, have gone on to become far more popular.
So what does Green Dot plan to do with Loopt? Green Dot's press release states,
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
The most appealing asset Loopt offered may have been its intellectual property, which includes a number of patents related to mobile marketing in the context of LBS.
According to Green Dot, "these patents will be important strategic assets as it pursues its mobile business opportunities."
Given the importance of patents today, Green Dot's relatively cheap acquisition of Loopt may prove to have been a savvy move. But it isn't necessarily a satisfying one for Loopt's investors and users.
Loopt had previously raised $17m in venture capital, so this exit was unlikely a home run for many of Loopt's investors. And given that Green Dot's press release references a "wind-down...of current Loopt services" it seems probable that the Loopt service itself will eventually be shut down.