Square’s $6 Billion Valuation

Privately-held Square has authorized a tender offer that places the company’s self-declared value at $6 billion, CNBC reported. To put that into context, Square’s similar valuation in January 2014 was $5 billion and in August 2012, it was $3.25 billion, Bloomberg noted.

The move is looking to bring in about $200 million, with part of it coming from the Government of Singapore Investment Corporation (GIC), CNBC said. “Asian investors have been piling into the U.S. technology market, backing hot start-ups such as ridesharing service Lyft, video-calling app Tango and texting service Snapchat. It’s part of the latest Silicon Valley rush that has lifted dozens of private companies into the billion-dollar club, and pushed some valuations passed $10 billion,” the CNBC report said, which added that the deal had yet to formally close.

Square was co-founded by Twitter founder Jack Dorsey.

Among backers are SecondMarket Holdings Inc., an online private-equity exchange, Kleiner Perkins Caufield & Byers, Sequoia Capital and Khosla Ventures.

“The jump in valuation follows a year of fast growth for Square. Its workforce has increased by 75 percent, from 400 at the beginning of 2013 to 700 employees this month. Starbucks Corp. invested $25 million in the payments provider in 2012 and began using Square’s services in 7,000 of its stores,” Bloomberg reported in January. “Square also rolled out a product that lets merchants ditch old cash registers for payment machines using Apple iPads. Square said it’s processing tens of billions of dollars in payments on an annualized basis. The company said in May 2013 that it was processing $15 billion, excluding Starbucks.”



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.