RegTech

Square May be Disrupting the Market, But It’s Still losing Millions of Dollars

We all know how well Square’s payment platform worked with Starbucks and its Mobile app. Almost 10 Mn consumers utilize the Starbucks mobile payments app to pay for their coffee, croissants and those blueberry chocolate balls. According to the company, they amount to a whopping 5 Million mobile payments every week.

What we do not know is how much this deal might be costing the startup. Square recorded a loss of around $100 Mn in 2013, broader than its loss in 2012 according to Wall Street Journal. Of this, $20 Mn is a result of its partnership with Starbucks! In Fact Starbucks is one of the investors in Square with a backing of $25 Mn.

Over the past three years, Square has consumed more than half of the roughly $340 million it has raised from at least four rounds of equity financing since 2009, says WSJ. Square's fees are basically 2.75% per transaction, however around 80% of that fee goes to directly to MasterCard and Visa. The company is believed to be valued at over $5 Bn.

"We are not, nor have we ever been in acquisition talks with Google," a spokesman told them. "While we appreciate that Square may be an attractive target for some companies, we have never seriously considered selling to anyone or been in any talks to do so.”

It was also reported that Square held discussions with banks like Morgan Stanley and Goldman Sachs Group in November last year, about a possible initial public offering in 2014.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

Apply to Become a Contributor