September 11, 2015
According to Bloomberg, San Francisco-based payments startup Square Inc. plans to hold its initial public offering in the fourth quarter of 2015. People familiar with the matter said that the IPO timing may change as per market conditions.
Square Inc. offers financial services, credit card reading/swiping devices and technologies, and payments solutions to businesses and individuals. Founded in 2009 by Jack Dorsey, interim CEO of Twitter Inc., Square processed nearly $30 billion in payments from its credit card transactions from millions of merchants.
In July, according to internal sources, it came to light that Square Inc. filed for its initial public offering (IPO) under the Jumpstart Our Business Startups Act. This act allows companies generating less than $1 billion in annual revenue to file IPOs confidentially under the US Securities and Exchange Commission. Sources also reveal that Square has been working with Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc. for the IPO.
Twitter Inc. Co-founder and interim Chief Executive Officer Jack Dorsey is in the news right now. He may be named the struggling social network’s permanent chief executive, but Dorsey has assured investors and key employees that he will also remain Square's Chief Executive, Bloomberg said.
According to one source, with respect to Square’s IPO timing, what is more important right now is market conditions rather than whether Dorsey remains the CEO.
People familiar with the matter said that Square’s advisers are already working to come up with plans for what needs to be done if Dorsey left. If time demands that the company go public without Dorsey, bankers would come up with the statement that the company’s position was so strong that his leaving the company would not affect its prospects.
Sources reveal that Dorsey is Square’s largest stakeholder with 26.2% shares. Other major investors include Co-founder James McKelvey and Khosla Ventures. In the fast-growing FinTech and payments industry, it is necessary for Square Inc. to have continuous capital; it is also broadening the range of services it offers. Recently, Square Inc. started offering loans to merchants through Square Capital, which allows merchants to pay back through sales processed by Square’s credit card reading devices. In June 2015, it started offering employee management and payroll services to businesses in California, and will be expanding to other states in the country very soon.