Mobile payments start-up Square has set its sights on global expansion after raising $200 million in a Series D funding round, valuing the three-year-old company at a reported $3.25 billion.
Square, founded in 2009, is the brainchild of Twitter co-founder Jack Dorsey and James McKelvey.
Based in San Francisco, Square is currently only available in the United States. However, that’s about to change.
Square has confirmed it has closed a $200 million Series D funding round from investors including Citi Ventures, Rizvi Traverse Management and Starbucks Coffee Company.
Other investors include Kleiner Perkins Caufield & Byers, Sequoia Capital and Visa. To date, Square has raised around $340 million, including its three previous funding rounds.
In 2011, British entrepreneur Sir Richard Branson invested an undisclosed sum in Square following a $110 million funding round, which gave the company a valuation of more than $1 billion.
The latest funding round gives the company a valuation of $3.25 billion, according to All Things Digital. Square confirmed the funding in a statement before highlighting its plans for the future.
“One year ago, Square had approximately 150 employees and processed over $1 billion in payments on an annualised basis,” it said.
“Today, Square has over 400 employees and is processing over $8 billion in payments on an annualised basis.”
“Square’s growing revenue and workforce precedes the company’s plans for international expansion later this year.”
The news comes just one month after Square announced a partnership with Starbucks, which, in addition to investing $25 million in Square, is using the platform to process transactions in-store.
It’s been suggested Starbucks will play a major role in Square’s international expansion. Outside of the US, Starbucks has 18,000 stores in more than 60 countries.
Square’s suite of products includes a free credit card reader for the iPhone, iPad and Android devices, allowing users to accept credit cards “anywhere, anytime”.
“Square Register” serves as a point-of-sale system for businesses to accept payments, track inventory, and share menu and location information.
Meanwhile, “Pay with Square” enables individuals to pay with their names at their favourite local merchants, discover nearby businesses, explore menu listings and store receipts.
Square’s credit card readers are already used by major retailers including Apple, Walmart, Best Buy, Walgreen and Staples.
However, Square competes with traditional point-of-sale payment processors such as VeriFone Systems and Global Payments, in addition to emerging mobile payments platforms like PayPal.
Square charges a fee of 2.75% on every credit card transaction.
While this rate is higher than the rate charged by conventional credit card processors, Square claims these processors include many hidden costs, which are never disclosed to customers.
Square does not have any additional fees beyond the 2.75% per swipe – there are no monthly fees or set-up costs.
The company claims that its costs, on average, are lower than the costs charged by conventional credit card processors.