Square raises money amid upheaval in payments market
Payments start-up Square is raising at least $100m in a funding round that valued the group at $6bn, up from a $5bn valuation earlier this year, according to a new company filing.
The filing, found by market research firm VC Experts, was made earlier this week after weeks of rumours that Square was looking for additional funding.
The company declined to comment, and it is not clear from the filings whether it might yet raise additional capital as part of this round of funding.
Square, whose core product is a card reader that lets small merchants accept credit and debit cards, last raised venture funding in September 2012, when it raised $200m in a round valuing it at $3.25bn. The filing does not identify who its backers in this round are, but CNBC has identified Singapore’s Government Investment Corporation as one of the participants.
The fundraising comes as Square faces financial challenges and a fast-changing payments market. Its core product, processing credit card payments, is a low-margin and competitive business, and the company is not yet profitable. Square secured a credit facility of over $100m in April, the company had confirmed.
Apple is attempting to revolutionise Square’s core business of helping merchants accept credit cards.
Apple Pay, a feature on the newly launched iPhone 6, will let consumers pay for goods with a tap of their iPhones on any card readers enabled with a special NFC chip. Square has said it will be rolling out readers that let merchants accept Apple Pay. It is also readying for launch readers that let merchants accept the “chip and PIN” cards which are soon to be rolled out in the US.
It is also trying to diversify from credit card processing. An attempt at building a mobile wallet failed, but it has since launched a slew of small business services, including data analytics and a cash advance programme.