Square gets $100 million, valuation now at $1 billion

Square, a service that lets anyone with an Android or iOS device accept credit card payments, received $100 million from venture capitalist Kleiner Perkins Caufield & Byers.

This also brings Square’s valuation to $1 billion. This is the third round of funding. Back in January they raised $27.5 million and the company was valued at $240 million.

The first question is where are these values coming from?  Right now there are 500,000 Square readers that have been delivered. There are 1 million transactions processed per day for a total of $3 million. Square’s take is 2.75% so they are generating $82,500 in revenue per day for a total of approximately $30 million annually. How does $30 million annually equate to a $1 billion valuation?

The second question is where does Square fit in with Near Field Communications (NFC) evolving? In a few years, Google Wallet and other NFC options will be in full swing. NFC lets you make mobile payments by simply holding your phone within 4-inches of another phone or receiver. Eventually, most phones will have NFC chips in them and if they don’t, there is always the option of applying a sticker. Using Square requires a reader that goes into the headphone jack. Is there a future for this?

There is no question that whatever success Square has enjoyed is because of co-founder Jack Dorsey, who created Twitter. He has also brought on board, Mary Meeker, a partner at Kleiner Perkins, Larry Summers, a former Treasury secretary and a chief economic adviser to President Obama, and Vinod Khosla, a well-known green technology venture capitalist.

[via intomobile]

About the Author: Robert Nazarian

Robert lives in upstate New York where he was born and raised. Technology was always his passion. His first computer was a Radio Shack TRS80 Color that used a cassette tape to save programs, and his first laptop was a Toshiba T1200FB that sported a CGA greyscale screen and two 720kb floppy drives (no hardrive). From the early 90’s through late 2011, he only owned Motorola phones starting with the MircroTAC all the way through to the Droid X. He broke that streak when he bought the Galaxy Nexus. Now he's sporting a Galaxy Note 4, and absolutely loves it. He has a wonderful wife and a 6 year old son. In his free time he enjoys sports, movies, TV, working out, and trying to keep up with the rapid fast world of technology.