Sequoia Capital has funded Square Inc. with $27.5 million, along with a series of strategic and individual investors. Square, the mobile payment transaction, is now valued at $240 million, after previous valuations that did not exceed $45 million. Back in those days, Khosla Venture would fund Square with $10 million. Roelof Botha, former CFO of PayPal and YouTube investor, currently Sequoia Capital venture capitalist, will be part of Square’s board.
After having launched its mobile payment services in October 2010 with promising results, Square Inc. is now receiving $27.5 million funding. Square is not the only start-up attracting significant funding, as recently Facebook received a $50 billion valuation and a $500 million investment from Goldman Sachs. Twitter as well received $200 million in December 2010, valuing the social networking website at $3.7 billion.
Twitter co-founder, and also owner of Square, Jack Dorsey, explained the reasons for the efforts taken by Square to attract investment. According to Dorsey, his aim is to expand the strart-up, currently at 64 employees, to 150 members. This is a natural step that is expected to be taken by the end of the year, considering the prospects of development of the start-up and ensuring they are ready to take on new challenges.
At the moment, over 50,000 small and large businesses are using Square’s services, the number of customers having almost doubled in the last 3 months. Square’s competitive advantage is the fee charged for each transaction which is cheaper than fees charged by credit card companies and other payment-system providers. At the same time, Square enables small businesses to gather and analyze data on their transactions.