Green Dot, the US fintech known for its prepaid debit cards and banking infrastructure, is attracting strong interest from private equity firms as it explores a potential sale, according to sources cited by Fortune.

Despite a subdued M&A environment, first-round bids were submitted last week. PE firms are reportedly forming consortia to work around federal restrictions that limit their ownership in banks to under 25%. The company owns Green Dot Bank, which provides core services for major clients including Apple Cash and Walmart’s MoneyCard. Strategics are also involved in the sale process, although options are constrained due to regulatory complexities.

Green Dot initiated a strategic review in March and brought on Citigroup to advise on the process. The announcement coincided with a leadership reshuffle, with former CEO George Gresham stepping down and William Jacobs appointed interim CEO.

Founded in 1999, Green Dot generated $1.7bn in revenue in fiscal 2024, with Apple and Walmart accounting for a combined 65% of its total income. Apple alone contributed $948m, while Walmart delivered $171m. The fintech has $5.3bn in bank assets.

Equity research from William Blair suggests that Green Dot’s bank charter and regulation around debit interchange fees may limit potential bidders. However, analysts also note that reduced regulatory pressure under the current administration could revive interest in banking-as-a-service platforms and encourage further consolidation.

Green Dot’s shares have risen more than 12% since the sale process was announced. The company is expected to report Q1 earnings on 8 May.

Source: Fortune