Back in the late 1990s, I met Steve Streit at a Starbucks, Inc. (SBUX). Tired of his career in the radio business, he saw an opportunity to use the Internet to change the financial services industry. While the business plan was still somewhat vague -- which is usually the case -- the vision looked spot-on.Well, his company became Green Dot. And now it has filed to go public.
Green Dot is a leading player in the market for general purpose reloadable prepaid debit cards (GPR). Basically, these allow consumers to spend money on the main payment networks, such as Visa, Inc. (V) or MasterCard Inc. (MA).
In fact, there are now roughly 2.4 million active Green Dot cards. No doubt, it certainly helps that the company has a sophisticated, low-cost infrastructure. There is also a network of more than 50,000 retail stores, which include biggies like Wal-mart Stores, Inc. (WMT), CVS Caremark Coproation (CVS), K-Mart, and 7-Eleven. And recently Green Dot struck a deal with PayPal to allow for e-commerce transactions.
Green Dot's growth has definitely been torrid. From 2005 to 2009, revenues have gone from $39.5 million to $234.8 million. There was even a profit of $8.1 million last year.
More importantly, the market is expected to continue to grow. According to a study from the Mercator Advisory Group, GPR spending is expected to go from $8.7 billion in 2008 to $118.5 billion by 2012. That's a 92% compound annual growth rate.
The underwriters on Green Dot's IPO include JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS).
Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook
. His website is at Taulli.com. 
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