Square raises another $100M at a $6B valuation

Square has already raised over $440 million, and could use this capital to expand its offerings

Financial trends and news by Steven Loeb
September 13, 2014
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It looks like the often-rumored Square IPO is going to have to wait a little longer.

Square is raising a new round of funding, worth at least $100 million, according to a report out from Forbes. The new round  would value the company at $6 billion. The company could actually be raising even more capital, since it is not known if the round is yet closed. No investors have yet been named. 

It is also being report that Square CEO Jack Dorsey authorized the round of 6.4 million shares of Series E stock at a valuation of $15.46 a share.

VatorNews has reached out to Square for confirmation and comment regarding the new funding round. We will update if we learn more. 

Since it was founded in 2009, Square has raised over $440 million in funding, include getting $200 million in a revolving credit line with Goldman Sachs leading the deal and Morgan Stanley, JPMorgan Chase, Barclays, and Silicon Valley Bank also participating.  The company most recently raised an undisclosed amount of funding from Victory Park Capital to expand Square Capital,  its cash advance service.

So why would Square need this new infusion of capital? For a couple of reasons, the most obvious being new competition in the form of Apple Pay, Apple's new NFC payment app that it launched this week

With ApplePay, users can pay with NFC technology and their touch ID directly from their phones. It works by taking the credit card the user already has on file with iTunes and adding it to Passport. Each time the user pays, they use a one-time payment number.

Square could also use the money to continue to diversify its offerings, and increase revenue, as it prepares for that inevitable IPO.

The company was said to entertaining the thought of an IPO this year. The rumors were making their rounds—supposedly of talks with banks, like Goldman Sachs and Morgan Stanley. And Square hired former exec Sarah Friar as its new CFO last year.

Dorsey, however, scuttled those plans in February due to problems with revenue. Namely, the company is not profitable.

Since then, Square has been expanding its services, including  Square Capital, which was launched in May of this year. The company has also expanded into appointment-booking with the purchase of BookFresh, and food delivery with the launch of Square Order, followed by the purchase of Caviar in August.

Getting more cash could be helpful for Square to continue expanding to new potential revenue streams, and getting to its public offering.

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