The archive · Consumer Apps · Product decision · 2005–2012
Loopt bet on location sharing before smartphones; Green Dot paid $43.4M cash
Y Combinator's Loopt let friends share locations on phones from 2005, years before the market arrived; Green Dot bought it for $43.4M cash in 2012.
Loopt
What the business is
Loopt was a location-based social network for mobile: friends could see each other's live whereabouts on their phones. Before app stores existed it distributed through US wireless carriers, starting with Boost Mobile, and later layered on real-time deals and loyalty offers.
Starting capital：About $17M in A and B rounds from Sequoia Capital and NEA after an early Y Combinator investment, per the HN discussion.
How it started
Sam Altman co-founded Loopt in 2005, with co-founders including Nick Sivo, as one of Y Combinator's early companies, at a time when the only way to put software on mobile phones was through carrier deals. The pitch was a mobile social network built around live location — friends always able to see where friends were — and the founders negotiated directly with carriers to distribute it, starting with Boost Mobile.
What happened
Loopt remained tied to US carriers as the iPhone rewrote the mobile market, and the product never resonated the way it needed to; a 2011 attempt to revive the company by chasing Groupon-style real-time deals and loyalty offers died an early death. By March 2012 VentureBeat reported that daily active users had fallen to about 500 before the sale — a figure CEO Sam Altman said was off by orders of magnitude — while commenters and press alike contrasted Loopt with Foursquare, which had found a more viral way to connect people and places.
How it ended up
On 2012-03-09 Green Dot, a publicly traded prepaid-card company that Sequoia had backed since before its 2011 IPO, acquired Loopt for about $43.4M in cash, with commenters estimating that roughly $9–10M of the proceeds was an employee-retention pool. Altman told HN the sale followed a slow realization that success required combining location with finance and payments, and that the team would pursue that vision inside Green Dot.
Background
Loopt was founded in 2005 by Sam Altman and co-founders including Nick Sivo, out of Y Combinator's early years, when the only way to put software on mobile phones was to partner with wireless carriers. The bet was that live location sharing between friends would become a mass-market mobile habit, so it was worth negotiating directly with carriers such as Boost Mobile and building the location and map infrastructure from scratch, years before smartphones and app stores arrived.
The market arrived more slowly than the company did. Loopt stayed tied to US carriers while the iPhone rewrote mobile, and the product never resonated the way it needed to; a 2011 pivot toward Groupon-style real-time deals and loyalty offers died quickly. On the eve of the sale, VentureBeat reported that Loopt's daily active users had fallen to roughly 500, a figure CEO Sam Altman said was off by orders of magnitude, and commenters pointed to Foursquare as the startup that had found a more viral way to connect people and places.
On 2012-03-09 Green Dot, a publicly traded prepaid-card company that Sequoia Capital had backed since before its 2011 IPO, acquired Loopt for about $43.4M in cash. Altman told the HN thread that Loopt had been too early to market and that the team had slowly realized real success needed location combined with finance and payments — a combination it would now pursue inside Green Dot. The thread, 200 points and 119 comments deep, spent most of its energy arguing over whether the price reflected the team and patents or simply Sequoia, an investor in both companies, rescuing a portfolio company.
What has to be true
- Founded in 2005, Loopt could only reach phones through carrier deals, so its distribution stayed locked to US carriers just as the iPhone rewrote the market.
- CEO Sam Altman admitted in the thread that Loopt was too early to market, and that early position did not translate into product resonance once location services went mainstream.
- VentureBeat reported daily actives near 500 before the sale — a figure Altman disputed — so the $43.4M price looked to many like Sequoia, an investor in both firms, arranging an exit.
- The debate itself shows the case's weight: 200 points and 119 comments on HN, with pg and other YC alumni arguing over whether the exit was merit or a buddy deal.
What can be applied
Loopt proved location sharing was appealing years before smartphones made it a habit, then lost the wave to Foursquare: being first only matters if you can still be there when the market arrives.
Aftermath
As of 2012-03-09 Loopt had just been sold: the team was joining Green Dot, where Altman said it would push the combination of location with finance and payments. Nothing in this batch documents what happened to the Loopt product after that date.
Sources
- Loopt acquired by payment card provider for $43.3m in cash
- Loopt was a lemon, dropping to just 500 daily active users prior to sale (updated)
spotted an error? The archive wants to know.
Your turn
You just read one. Describe what you are building, and see who is betting on the same thing.
Free account · 3 free questions · no card