Mobile payments company Square is to raise some $200 million in
new funding from private-equity investor Suhail Rizvi bringing the
company’s valuation to less-than-expected $3.25 billion, US media
reported.
This is the third large funding round for the
mobile POS provider in three years and aims to put Square in a
position to compete with the likes of Google, Intuit and
PayPal.
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Experts suggest that investors will be looking
to treble their investment by the time the company goes public,
meaning that Square is expected to reach a 10bn valuation in a few
years.
However, one payments analyst did advise
caution, saying that “card processing margins are very low, and
competition in the mobile POS market is already high and increasing
all the time. Visa, MasterCard and PayPal are all throwing money at
this technology, as are the big payments hardware providers, so it
will be an interesting battle to watch over the coming few years as
the mobile POS market solidifies”.
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By GlobalData
