Green Dot Fintech Company Relocates from Silicon Valley to Austin
Green Dot Corporation is currently the world’s largest prepaid debit card company. The company announced that it is relocating its corporate headquarters to Austin, Texas. The fintech company’s decision to move its headquarters from California was primarily motivated by tax and business considerations.
Texas, the Business Friendly State
“Texas is a business-friendly state, and we’re looking forward to engaging and benefiting from the impressive talent pool in the region, as we work to seamlessly connect more people to their money, both directly through our own fintech, and through our partners,” the company said in a released statement.
Other major technology companies have also recently announced moves from California to Austin, Texas. Hewlett-Packard, Oracle, and Palantir are some of the other household names that have also relocated to the Lone Star State. Many of the Silicon Valley companies that have announced relocations have cited lower taxes. In addition, there is more affordable housing in Texas. Green Dot will be setting up its Austin headquarters by the end of the year.
Austin, the Silicon Hills
“Companies choose the Austin region because it is where they think they will be most successful, and it is where they will find high quality of talent that enjoys a high quality of life,” states Laura Huffman, Chief Executive of the Austin Chamber of Commerce.
The company’s 1,300 employees will be allowed to work remotely even after the pandemic. The CEO of JPMorgan Chase, Jamie Dimon, announced that employees will need to return to the office soon. But Green Dot’s CEO is embracing a permanent remote work model. Green Dot will maintain four hubs. There will be it new headquarters in Austin, Texas. Inn addition, the company will share office space in Tampa, Florida, Cincinnati, Ohio, and Pasadena, California.
Green Dot Remote Work Model
In order to maintain the company’s distinct culture with a remote work model, Green Dot will be hosting regular in-person social events at its four hubs. Employees that seek more social interaction with co-workers, such as younger employees, can simply live near a Green Dot hub.
CEO Daniel Henry, newly hired in March 2020, has been leading efforts to transform the company. Although Green Dot reported that profits decreased by 82% in the first quarter of 2021, Green Dot has raised its financial forecast for the rest of the year. Government stimulus checks and generous unemployment benefits have contributed to the company’s more promising outlook. These benefits have boosted customer account balances and accelerated the shift to digital payments.
Founded in 1999, Green Dot has a market valuation of nearly $3 billion and is a fintech partner to companies such as Apple and Amazon. One of Green Dot’s goals is to provide financial services to a broad population, including to the underbanked and people with low credit scores. The esteemed Silicon Valley venture capital firm Sequoia Capital was an early investor in the financial services company. In 2010, it went public in a $2 billion initial public offering (IPO).
In addition to being the world’s largest prepaid debit card company, Green Dot’s technology platform is used by Apple Pay Cash and the Uber Debit Card by GoBank. Green Dot also partnered with Wal-Mart to offer the Wal-Mart Everyday Visa Card. In 2012, the fintech company acquired a mobile app development company called Loopt. This acquisition facilitated expansion of Green Dot’s mobile banking solutions.
Green Dot Experiences Rapid Growth
Although Green Dot is smaller than fintech rivals such as PayPal, Square, and Chime, it has been growing rapidly in recent years. “The assets that Green Dot has are unparalleled with any fintech company in the country. They are very much undervalued, and I think our company is very much underestimated,” states CEO Daniel Henry.
In 2020, Green Dot’s stock price rose 140%. There is still a large opportunity to provide digital banking services to underbanked populations. It is estimated that over 100 million Americans are underserved by traditional banks.
Green Dot’s CEO further commented, “we need to digitize banking and make it more efficient and more Apple-esque in terms of the user experience. That’s going to add additional value for us in the near term. And then, the moon-shot opportunities with our partners now is super, super exciting for us.”
The company recently acquired the tax refund unit from Republic Bank for $165 million. The deal provides many synergies. Green Dot is looking for additional opportunities to create value and gain an advantage over peers. It could explore more accretive acquisitions.
The announced transition of Green Dot’s headquarters from Pasadena, CA to Austin, TX should provide the fintech company with exciting possibilities ahead. According to the Texas business network YTexas, more companies have relocated their headquarters to Austin than any other city in Texas. The CEO of YTexas, Ed Curtis, states, “Austin and the technology scene, the culture here, is what really attracts them. It’s probably the closest thing they have to what they had in California.”