Since almost no one covers the industry in the blogosphere, I might as well start for my own edification.

Today, Cash America International, a publically traded provider of payday advance loans, just acquired CashNetUSA for around $35M. I cant seem to find whether CashNetUSA is venture funded, which might explain that the $35M price tag. It is a good lump of cash for the owners/entrepreneurs, but as far as a VC investment is concerned, this is not exactly a homerun. What the acquisition does potentially signal is a turning point in the industry where bricks and mortar players are seeing some sort of inflection point in share shift towards upstarts in the industry trying to leverage technology to increase efficiency in either distribution or customer service.

The industry as a whole is known to be a little bit shady, but with hightened interest in the segment, competition is driving increased visibility and accountability. Sequoia has in fact made a series of bets in the underbanked sector. One of which in the payday loan space is called PayDay One. Another called Xoom for Money Transfer. And ofcourse Green Dot in financial services. Another VC firm that is also very active in the segment is Oak Investment Partners . . . but in the later stages. Given how large the opportunity is, I’m surprised how many VC’s are chasing after the latest web 2.0 play but not really playing actively in this industry. . . you invest in what you know I guess . . . the old Buffet adage . ..

Learn more about Green Dot here at our Prepaid Visa web site.