With a new class of passive location apps on the rise, failed geo-mobile apps of the past need to cut their losses, so Loopt today announced plans to sell to banking and payment solutions company Green Dot for $43.4 million. Green Dot hopes checkin functionality can help it attain and hold on to customers by expanding from prepaid cards into a mobile wallet. And it needs Loopt’s talent to stick around to make that happen, so $9.8 million of the cash is reserved for a retention pool.

SXSW starts today and no one has been talking about Loopt. Had it waited until after the event and watched younger competitors revel in the spotlight, its valuation could have sunk, so this was wise timing to sell.

While Loopt was once a potential competitor to Foursquare and Gowalla, the checkin app space has thinned out over the last year. Foursquare showed dominance and became the clear leader, while Yobongo was acq-hired by Mixbook and Gowalla sold to Facebook rather than fight a losing battle. Apparently Loopt decided to follow Gowalla’s lead.

$43.4 million in cash is an impressive sum to have sold for compared to what the better-positioned Gowalla managed by many accounts, at least until that Facebook stock goes liquid. Loopt had taken $17 million in funding from Y Combinator, Sequoia, and New Enterprise Associates through its Series B. Green Dot has raised $33 million to date, much from Sequoia as well, [ed. it's a publicly-traded company] which could mean the firm pushed for the acquisition to protect its Loopt investment.

Green Dot will now have the means to let users announce when and where they make payments, which could power rewards systems. Also, Loopt’s mobile marketing messaging patents also made it attractive to Green Dot. They could help the banking and payment solution communicate better with its customers, or let it go on the offensive.

In a move straight out of left field, Green Dot, a U.S. provider of prepaid debit cards, has acquired Loopt for total consideration of $43.4 million in cash.

The press release is below, we’re updating this post.

Based in Silicon Valley and founded in 2005, Loopt offers mobile location-based services that allow users to discover the world around them, receive alerts about local deals, review local businesses and interact with friends on their iPhone, BlackBerry, Android or Windows Phone smartphones.

Co-founded by Sam Altman (CEO) and Alok Deshpande (Head of Product), it received initial funding from Y Combinator and went on to raise capital from Sequoia Capital and New Enterprise Associates.

According to CrunchBase, Loopt has raised $17 million.

Green Dot, which provides low-cost banking and payment solutions to U.S. consumers, is putting $43.4 million in cash on the table for the company, which includes roughly $9.8 million to be set aside as a retention pool for key Loopt employees. Green Dot expects the transaction to close by the end of this month.

It seems like an unlikely buyer for a company like Loopt, but Green Dot says it expects to put its products to good use, to improve customer acquisition and retention, drive the adoption of new banking and payment products and to become a leader in mobile wallets, rewards and payment solutions at retailers nationwide.

The company also cites Loopt’s trove of patents related to mobile marketing in the context of location-based messaging tools as a driver for the purchase.

Green Dot to Acquire Loopt

Loopt is a pioneer in mobile user interface design, real-time location-based mobile rewards marketing, and geo-location application technology

MONROVIA, Calif.–(BUSINESS WIRE)–Green Dot Corporation (NYSE: GDOT), a provider of widely distributed, low-cost banking and payment solutions to a broad base of U.S. consumers, has entered into a definitive agreement to acquire Loopt, Inc., of Mountain View, California. The transaction is expected to close by the end of the first quarter of 2012 and is subject to regulatory approvals and other closing conditions.

“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 acquisition of Loopt will provide Green Dot with a number of key strategic benefits that are expected to a) improve customer acquisition and retention of its current prepaid debit card products, b) drive the adoption of new banking and payment products targeted to new segments of consumers, and c) provide the opportunity for Green Dot to become a leader in mobile wallets, rewards and payment solutions at retailers nationwide. Furthermore, Loopt holds several patents that are applicable to mobile marketing in the context of location-based messaging delivered real-time to a mobile handset. Green Dot believes that these patents will be important strategic assets as it pursues its mobile business opportunities.

“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. “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.”

Loopt co-founder and CEO Sam Altman stated, “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.”

Upon closing of the transaction, Loopt’s current headquarters in Mountain View, California will become the new Silicon Valley hub for Green Dot’s mobile technology and product development team.

Green Dot will pay total consideration of $43.4 million in cash for the company, which includes approximately $9.8 million to be set aside as a retention pool for key Loopt employees. Green Dot expects this transaction will result in approximately $14 million of incremental operating expenses during the remainder of this year which will reduce the Company’s previously guided 2012 full year adjusted EBITDA accordingly. This amount includes the above mentioned retention payments, ongoing salaries and benefits for retained Loopt employees, wind-down expenses of current Loopt services and other expenses associated with the costs of integrating Loopt’s technology into Green Dot’s operating infrastructure.

Green Dot will provide further details about this acquisition, including information on Green Dot’s mobile strategy, during its Q1 earnings call on April 26, 2012.

Location-based service Loopt has been allowed its first patent, and it could be a big one.

The patent, as described, seems relevant to numerous existing products, including Google’s Latitude. In layman’s terms, it describes using your location to display relevant ads and offers on top of a map, as an interstitial, or as a text ad — another claim also discusses displaying where your friends are on the same map. The patent was first filed in 2007, with Loopt founder Sam Altman listed as the primary inventor (Loopt got its start long before the likes of Foursquare and Google Latitude).

The patent, which is listed as Application Number 11/931,113 by the US Patent and Trademark Office, still hasn’t technically been granted. But it has been “allowed,” which is a precursor to being granted. At this point, it could still be a few months before the patent is granted, assuming that Loopt pays all the proper fees and files the proper paperwork.

Here’s one relevant claim:

“17. A method comprising: providing, by a server, an advertising campaign including a plurality of advertising messages for transmitting to users of mobile devices at different times or locations; receiving, by the server, the geographic location of a mobile communication device operated by a user within an area; and transmitting to the mobile communication device for display, at least one of the plurality of advertising messages, wherein the advertising message includes content relevant to a characteristic of the user or activity performed by the user and is in the form of a text advertising message, coupon and/or graphic element that is superimposed over a map representation of the area around the mobile communication device displayed on a graphical user interface of the mobile communication device of the user, displayed in an interstitial display page of the graphic user interface, or displayed as a text-based message, and wherein the ad message is transmitted in response to the location of the user.”

It’s unclear what this means for Loopt (the company isn’t commenting). Loopt has sworn to the Patent Pledge, which states that they won’t offensively use their patents against any company with fewer than 25 people. Of course, most of the location-based companies you’ve heard of have more than that. Even if they never use it offensively (which would be nice), this may be a good defensive patent for Loopt going forward.

Part of me feels like the notion of putting a layer of ads on top of a map, alongside where your friends are, is an obvious use-case for smartphones. This was filed in 2007, so the assumption may be that it was less obvious back then.

Location-based service Loopt is getting some nice promotion for the next three months, courtesy of San Francisco’s International Airport and Virgin America. And it might make your trip to the airport a bit less expensive.

Beginning this week, travelers going through SFO’s new Terminal 2 will be able to check-in on Loopt to receive an offer from one of six businesses located within the terminal, including Kiehl’s and Natalie’s Candy Jar — as well as hefty discounts from Virgin America itself. The difference between this and most other check-in based offers is that the deal you receive is chosen randomly from one of these merchants (you just need to check-in at Terminal 2).

The promotion is being coordinated by Virgin America and Loopt, but travelers flying on American (which is also based in Terminal 2 at SFO) will be able to score the check-in deals as well. Each of the participating merchants is deciding what they want to give away, and while some merchants in the terminal aren’t participating, Loopt says that they may well jump on board in the coming weeks.

The catch? After installing and signing up for Loopt, you’ll need to watch a clip called ‘A Day in the Life of SFO’s T2′ before you can see which offer you’ve received. It runs nearly three minutes long (which seems pretty hefty) and you have to watch the whole thing. But the video itself is well done, so it’s not a painful experience… provided you aren’t late for a flight. If nothing else, it’s the first time I’ve ever watched a commercial for an airport terminal.

Loopt is going to be promoted to travelers through a variety of ways in the terminals: each of the businesses giving out deals will feature a sign, and the terminal itself will feature screens telling people to install the app and check-in.

Android: While daily deal sites like Groupon present some attractive offers, if there's a particular local business you'd like to score a deal from, you may be able to request it via Loopt u-Deals. The app is currently available for the San Francisco Bay Area, but is headed to more locations and mobile platforms soon. More »

Loopt has gone through quite a few incarnations, and this morning that tradition continued as the mobile social network announced it was entering the daily deals space with a service called U-Deals. In essence, U-Deals lets users request their own deals. After submitting an idea for a deal, users can then drum up interest by way of social media channels like Facebook, Twitter, etc. If the deal receives enough support, Loopt will contact the business and request that they help turn the deal dream into a deal reality.

Of course, as my colleague Erick Schonfeld pointed out, for this to work, Loopt needs to get enough deals requested and turned on for this to become a viable model for Loopt. Not to mention there’s some friction when considering that not many people have heard about Loopt, let alone think of it as a daily deals provider. And then there’s the issue of building a sizable salesforce.

There was some skepticism in the comment section at the end of Erick’s post over Loopt’s new direction, and some made the good point that user-generated deals have been tried before, without a lot of success — not to mention that it remains to be seen whether or not users will be willing to wait for deals to be approved. We do love our instant gratification. There’s certainly something to be said for the growing interest in the combination of location-based-services and daily deals, even if the LBS space is brimming.

Today, mere hours after announcing U-Deals, Loopt took the first step towards silencing its critics (though admittedly it still has a long way to go before that silence is permanent), as its first U-Deal sold out in under an hour. 48 minutes, to be precise. The first U-Deal, made in partnership with Virgin America, offered $35 for a Virgin America ticket voucher valued at $100. 500 deals were offered, and 500 deals sold in 48 minutes. Not too shabby.

Discounts on airfare are definitely in demand with the high price of tickets today, so this was no doubt a great place to start. Especially with Virgin America. But it will be interesting to see if U-Deals can sustain relevant deals of this kind when the names aren’t quite as big. If so, there could be great things ahead for Loopt’s new service. We’ll have to wait and see.

But for now, it’s probably fair for Loopt to say, “How do you like ‘dem apples?”

For now.

Mobile social network Loopt is turning on the revenue streams by going after the daily deal space. It already partnered with Groupon to show users nearby Groupon Now deals via notifications, but today it is launching its own twist on daily deals. Loopt is calling them U-Deals.

Instead of going out and getting a large inventory of deals at local merchants, U-Deals lets users request their own deals. And they try to rally their friends and other people to support the deal as well through Facebook, Twitter, email, and whatnot. Once a deal hits a tipping point, then Loopt will contact the business and request the deal. This will require a sales force, but not one as big as a traditional daily deal provider. “One of the things we like about this is that it’s neither self-serve nor a pure sales force model,” says Loopt CEO Sam Altman. “In our beta testings, businesses respond well to a phone call like ‘we have a check for $2000 and 100 new customers for you if you agree to this deal.’”

Loopt is working in partnership with ChompOn, a white-label daily deals platform that launched at TechCrunch Disrupt last year. A New York City-based startup called Ringleadr that is about to launch is also targeting the reverse-deals concept.

In order for this to work, Loopt needs to get enough deals requested and then turned on. “Liquidity is certainly the key issue,” admits Altman. Also, local commerce is a hard nut to crack. U-Deals has the advantage of being an easy sell, as Altman says. Loopt is basically coming these small businesses with pre-qualified sales. But many of them have probably never heard of Loopt. (“Is that like Groupon?”) My guess is he will need a larger salesforce than he expects, and that’s if he’s successful. Are people even looking for deals inside Loopt?

Here is the big issue with this model. The people who say they want a deal at a restaurant or store are probably already customers of that merchant. The appeal of daily deals for local merchants is to get new customers in the door. It’s customer acquisition. Where Loopt can make this work is if the people who initially request the deals can convince other people who aren’t already existing customers to buy in.

Loopt a checkin app that seems to be pulling out all the stops in order to survive in a saturated space, has now partnered up with Groupon Now! in Chicago in order to provide Loopt users with locationally relevant realtime deals around them, push notifying them when they are near a deal.

While the plan is to notify users of deals when the app isn’t even open, and the time sensitive Groupon Now! deals will also appear on place pages within Loopt, so users can see and share with friends their favorite relevant deals in the vicinity.

Loopt has basically beat Groupon to bringing this LBS/realtime technology to its own app, where you still have to type in your zip code to get more granular locational deal notifications. But Groupon recently acquired Pelago, so I wouldn’t be surprised if a similar functionality is on its way.

Currently the specific Loopt service is only available in Chicago, and users who are interested can go into their Loopt settings, turn Reward Alerts on and start receiving their once a day, location specific Groupon Now! deal well, now!.

As 14% of subscribers interact with daily deal push notifications, this is a mutually beneficial and strategic partnership between the two companies. But one can help but wonder when Groupon will apply this same technology to its own mobile app and what exactly that will mean for Loopt long term.

Loopt is planning on expanding the Groupon Now feature nationwide, and it should be available on both Android and iPhones in each market.

Loopt, a location-based checkins app along the lines of Foursquare, is announcing the launch of Loopt Qs today at Where 2.0 Conference.

Loopt Qs are “micro reviews” or polls that the Loopt community team will create around a place (like “What’s the best thing to order if you’re a vegetarian?” or “What’s the price range of this restaurant?”), Users can share their answers with Loopt users and with friends on Facebook and Twitter, in order to get more answers to a question or to share a specific answer.

By pressing the Qs button on the Loopt app’s homescreen, Loopt users can see a realtime stream of Qs around them or contribute answers to the Qs . They can also flip through the Qs results on each place page. Loopt founder Sam Altman tells me that the Qs are designed to give the user quick bursts of information (“in less than three seconds), in order to save them the time of scrolling through endless and sometimes irrelevant reviews on Yelp.

“We hope that this actually reflects the way users search on mobile and the kind of information users want,” Altman tells me. “We want to answer the queries that users are making on search.” He emphasizes that 20% of all Google searches are local, and is targeting Qs to that market.

While apps like Foursquare and Yelp offer users recommendations, the actual polling format is nascent. Startups like GoPollGo are making inroads on the web, but we’ve yet to see a successful mobile foray. It’ll be interesting to see how users take to this new micro-review format, especially when they’re out at a restaurant or bar. But I’m pretty sure Loopt will have to let people contribute their own Q in order to make this a more sticky features.

Loopt Qs will be rolling out in San Francisco in the coming weeks, and to the service’s 5 million registered users (1 million of which are active) in the coming months. The app is currently available on iPhone, iPod Touch and Android.

With a little over a week until SXSW begins in Austin, Texas, our inboxes have been hemorrhaging with seemingly every startup under the sun attempting to launch something in time for the festival. Many of these are app-related. And specifically, many are iPhone app-related, which means they need extra time to get approved by Apple. And that means getting things out there this week, just in case. And so it begins.

Today, the location-based service Loopt is launching a new feature which will definitely entice users to check out the app at SXSW: Push Deals.

Yes, the Loopt Android and iPhone apps will now be able to send you deals in realtime based on your location by way of push notifications. This means that if you’re walking by a restaurant and it’s a slow night, they can hit a button to send out a notification to give you a deal to come in. This works on a network like Loopt (as opposed to Foursquare) because the app uses background location to keep track of you.

Obviously, all of these push settings can be controlled by the user in the app, so you’re not getting spammed by deals as you walk around a city. You’ll be able to see the deals that you want, founder Sam Altman says.

And the first test of the system will be at SXSW with some pretty killer deals — Loopt will be giving away over $50,000 worth of merchandise to those using the app in Austin. What kinds of stuff? This kind:

• TiVo is giving away TiVo premiere packages
• Microsoft is giving away Kinects
• Jawbone is doing Jamboxes
• Southwest is giving away free roundtrip tickets
• Altec Lansing is giving away Mix Boomboxes
• Yurbuds is doing Ironman Yurbuds
• Tony Hsieh and Guy Kawasaki are giving away signed books
• And a lot more from people like Fox, Gilt City, OkCupid, and more

“These will all be ‘flash deals’–users get a message with the location at the same time if they’re near the rewards wagon, and there are limited supplies,” Altman says. He also notes that there’s no limit on how often you can win — you just have to be first to get to the wagon mentioned in the message.

Once SXSW is over, Loopt will begin rolling these Push Deals out to select cities.