Green Dot Sells Bank and Embedded Finance Units

Banking FinTech Green Dot’s businesses now have new owners, according to a Monday (Nov. 24) news release.

Smith Ventures, a private equity company, is set to acquire and privatize Green Dot’s nonbank financial technology business and operations for $690 million, the release said. That business will continue to function as a FinTech and embedded finance company.

Meanwhile, CommerceOne Financial will acquire Green Dot Bank and its assets and operations, and merge to become a “new publicly traded bank holding company that serves as the FinTech’s exclusive issuing bank,” according to the release.

Separating the two business lines sets up new opportunities for the embedded finance company. At the same time, a long-term commercial relationship with CommerceOne enables Green Dot to continue to serve customers, the release said.

“This is a pivotal step for Green Dot and CommerceOne, bringing together a world-class embedded finance leader and a well-capitalized, trusted bank,” said Bill Smith, CEO of Smith Ventures and a founding member of CommerceOne Financial’s board, in the release. “With these transactions, we will drive sustainable value creation for all stakeholders. Combining Green Dot’s payments expertise and CommerceOne’s financial strength, we will be well-positioned to deliver exceptional experiences for customers, partners and employees.”

Green Dot earlier this month reported a 21% year-over-year increase in revenue for the third quarter, with management highlighting banking-as-a-service (BaaS) and new money movement partnerships centered on embedded finance.

PYMNTS Intelligence collaborated with Green Dot on the report “Embedded Finance as a Strategic Initiative,” which found that embedded finance has gone from being an option to a necessity.

The report found that 99.8% of the 515 companies surveyed now offer at least one embedded finance capability. Over three-quarters of those companies hope to expand that footprint in the next year, and more than a third plan to do so over the next 180 days.

“This heightened urgency reflects two interconnected realities,” PYMNTS wrote Monday. “First, embedded finance capabilities are evolving quickly, and platforms must keep pace or risk falling behind competitors with more modern, seamless experiences. Second, the more deeply companies integrate financial functionality, the more it comes to represent not simply a set of transactional utilities but a transformation in how companies think about customer value, operational resilience and strategic identity.”