Commerce Revolutionizer Squareup.com Gets $200M Valuation

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January 4, 2011
By the ZippyCart Shopping Cart Reviews Content Team

Twitter co-founder, Jack Dorsey is seeing his latest startup Squareup.com through the process of closing a rather large and competitive round of funding. The company is currently carrying a valuation of $200 million, a hefty price tag that is bringing in a mix of investors. Although not all of the investors have been confirmed or named, it has been rumored that Sequoia Capital, Benchmark Capital, and Kleiner Perkins Caufield & Byersa will be leading this round, as well as a major payments corporation like Visa, American Express, or Mastercard to be a strategic contributor.

Square was founded in 2009 by Dorsey who wanted to make accepting debit and credit card payments from mobile devices like an iPhone or iPad as easy as accepting cash. Some tech experts are forecasting Square’s services may very well revolutionize commerce. The device developed is a mini credit card reader shaped like a square that easily plugs into a mobile device running Apple’s iOS software or Google’s Android operating system. Within one swipe of a credit or debit card through the reader enables anyone to make a complete transaction with a receipt sent electronically anywhere in the world. Square is making person-to-person transactions simpler and even more convenient. People like babysitters, dogwalkers, artists, and outdoor vendors among many other businesses can quickly charge their customers on the go without having to run to a register or go through the dated process of waiting for a check in the mail. This can potentially increase the opportunities for additional sales. People subscribed to Square’s services can also use the device to easily personal pay bills or wherever else money is owed.

Square is processing millions of dollars a week with their services and estimated pulling in about $11 million a year in revenue. However, it looks as though the company has greater potential to increase their money earning opportunities. Currently Square has yet to introduce a personal transaction fee to its users as most payments companies do and maintains a low basic transaction fee of 2.75 percent, perhaps as a way to further grow their client base.

As this company develops and looks to gain much more in this round of funding, it will be interesting to see how commerce integrates Square’s technology into their day-to-day transactions or if it ever does. With the threat of fraud always lurking over payment services, existing technologies like near-field communication (NFC) devices gaining traction, and competitors looking to replicate their services, it is still unclear if this startup will make a place on top.