$4B: A Big, Square Number?
The company is apparently looking to raise more money -- perhaps up to $250 million -- at a valuation of $3 billion to $4 billion. Last year it succeeded in raising $100 million at a $1 billion valuation, making this week's purported valuation all the more amazing.
I wrote last week that Square is an attractive company for a big player that wants an mCommerce play, but if this valuation holds true, it may be too expensive for most. In that case, it becomes everyone's biggest competition, but none more so than the wireless operators. (See 5 More Mobile Apps That Could Get Acquired.)
The startup, led by Twitter Inc. founder Jack Dorsey, has managed to do what mobile operators have only talked about for years -- make mobile payments simple for consumers and affordable for small companies, while also inserting themselves into the value chain. The company processes $4 billion in transactions a year.
Square has found an ally in T-Mobile US Inc. , which sells its credit card reader to small businesses at its retail stores. But, the other carriers have so far ignored the startup, preferring to wait for Near-Field Communications (NFC) to be widely available so they can push their own services like Isis . (See T-Mobile Squares Off on Mobile Payments.)
In the meantime, Square's taken off and others, including experienced payments vendor PayPal , Visa USA and Google (Nasdaq: GOOG), are pushing their own services. (See Learning to Play Nice With NFC, How Secure Is Your Google Wallet? and PayPal Sues Google for Mobile Wallet.)
With these formidable (and well-funded) companies already evangelizing the mobile payments market, I'm seeing fewer and fewer reasons to wait around for the wireless operators to get their act together.
— Sarah Reedy, Senior Reporter, Light Reading Mobile