Square is on the verge of raising new capital to the tune of $200 million which will nearly double the valuation from just a year ago. The reported $200 million raise will increase the valuation of Square to $3.25 Billion, a sizeable number in anyone’s books, but still a disappointment to the $4-$5 billion valuation is was seeking. So did the lackluster performance by recent tech IPO’s including Facebook, Groupon and Zynga put a damper on this raise?
Experts suggest that late-stage investors that were burned in these recent IPO’s just don’t have the profits to spin back into other tech companies. However, it seems that is today’s market climate, there is still a lot of money available for investing. Perhaps this conservative approach may really be setting up Square for a solid performance when it reaches IPO stage.
Although Square isn’t commenting on this raise, it is sending off positive signals including the $6 billion in annualized payments it is processing each year and the hiring of a new CFO from salesforce.com. Plus square now has around 350 employees, which would roughly translate into approximately $10 million in valuation per employee.
Source: Business Insider July 2012