Green Dot to Split in Two with $690 Million Sale to Smith Ventures

Fintech company Green Dot has announced a significant strategic shift, deciding to split its operations in two as part of a complex sale. The company will sell its fintech platform for $690 million to Smith Ventures, a private equity firm founded by entrepreneur Bill Smith, with both transactions expected to finalize in the second quarter of 2026.

Under the terms of the agreement disclosed on Monday, Smith Ventures will acquire Green Dot’s nonbank fintech business. This transaction involves a substantial cash payment, with $155 million earmarked for the newly combined entity formed with CommerceOne Financial, which will also acquire Green Dot Bank. CommerceOne Financial, based in Birmingham, Alabama, is the holding company for CommerceOne Bank and will serve as the exclusive issuing bank for Green Dot’s nonbank operations.

The deal reflects a broader strategy by Green Dot, which has been reviewing its options since March. The company’s decision to separate into two parts aims to enhance operational efficiency and improve market positioning. In a press release, the companies emphasized the potential for the merged banking entities to create a diversified financial institution that leverages both lending and deposit-generating capabilities.

Bill Smith, known for his previous ventures including Shipt, an online grocery delivery service sold to Target, has a long-standing relationship with Green Dot. He expressed his confidence in the newly formed entity, which will combine Green Dot Bank’s assets of approximately $5 billion with CommerceOne’s $840 million in assets. This partnership is expected to bolster liquidity and regulatory capital, essential for future growth.

The financial details of the transaction indicate that $65 million will be allocated to settle existing debts, while the remaining $470 million will be distributed to Green Dot’s shareholders. Each shareholder is projected to receive a minimum of approximately $14.23 per share.

Kenneth Till, CEO of CommerceOne, noted the strategic advantages of merging the two banks, stating, “This combination should position the new CommerceOne as a diversified bank with multiple growth drivers and top-tier profitability.” He highlighted the importance of the deposit generation capabilities from the partnership, which will provide essential liquidity for the loan generation operations.

Despite these developments, Green Dot has faced challenges recently, reporting losses of $52 million during the first nine months of 2025, following a $26.7 million loss in the previous year. The company’s leadership has also seen significant turnover, with multiple CEOs since the departure of founder Steve Streit in late 2019.

Analysts are cautiously optimistic about the sale, recognizing potential long-term benefits but also identifying risks. Cristopher Kennedy, an analyst at William Blair, expressed concerns over management changes and customer retention, stating that these factors could cloud growth prospects in the near term.

Founded in 1999, Green Dot pioneered the prepaid card sector and initially thrived through its partnership with retail giant Walmart. However, it has faced increasing competition from lower-cost rivals in recent years. The company’s stock, which peaked at over $85 in 2018, has dramatically declined, trading at $11.78 on Monday.

As Green Dot embarks on this new chapter, the focus will likely shift toward how effectively it can navigate the complexities of the transaction and stabilize its operations in an increasingly competitive fintech landscape. Kevin Wack contributed to this report.