Square Raises $150M at a $6B Valuation | Hacker News Reader

Square Raises $150M at a $6B Valuation

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127 pointsminimaxir108 comments

> "Square, a six-year-old start-up, spent much of its early years bringing small, square-shaped credit card readers to small and medium-sized businesses."

6 years old, just raised $150mn...yeah, that's not a startup anymore. It seems some people consider tech companies and startups to be equivalent, but startup is a term for business stage not business type.

P(startup) = c * P(pivot), for some constant c

People can argue what makes a company a startup or not initially, but I think this is the more important part, because it gives you the most useful fact about a startup: how you can tell when it stops being one.

If you're doing customer discovery, throwing MVPs out to see what sticks, and pivoting constantly, you're a startup. If you've found product-market fit, are making quality products, and are entrenching yourself into the market and eliminating competitors, you're a business.

Or, to paraphrase Eric Ries: a business is a predictable engine for repeatable revenue generation. The process of groping around in the dark trying to create such an engine, is a startup.

Hopefully c <= 1 :-)

Is Apple a startup then, having pivoted from computers, to music players, to phones?

I've noticed Paul graham and others redefine startup to refer to companies with large growth rates.

In this case, if the company is still growing quickly 6 years in, maybe its still a startup?

Interesting, I've seen a lot of definitions for a startup now, but none of them really seem to grasp the core of it. Startups have repeatable business models, large growth rates, but Amazon is that and it's not a startup anymore. I like the above description that a startup still is confused about its product, customers and how to make money.

So what about Uber, Airbnb, Dropbox then for instance? For me Airbnb and Dropbox are definitely startups still, however Uber not anymore, even though they have similar size.

Why is that, is it the culture, where flat hierarchies are combined with high-growth rates? This is not the case with Google, definitely not Amazon, Apple, Facebook anymore, however, it is the case with Dropbox with 979 employees and AirBnb with 1,876 employees. Uber has 2,625 employees, are they already out of the startup size that is maybe 2,000 employees?

It's actually a term for businesses that are designed to grow fast and still experience a high growth rate:

http://www.paulgraham.com/growth.html

That's Paul Graham's definition. There are lots of others, which is one reason people get confused when arguing the topic.

You could use other definitions, such as picking an arbitrary number of years and call anything younger than that a startup. But maintaining a high growth explains so many aspects of a startup's life (why founders give up parts of their company to investors, why most are focused in technology etc) that it seems any other way of looking at it would be misleading at best. Why would a 6-month restaurant be called a startup if it's not designed ever to scale beyond its neighborhood, or why would you no longer call a startup something that keeps growing weekly at 5%?

>> If you want to understand startups, understand growth. Growth drives everything in this world. Growth is why startups usually work on technology—because ideas for fast growing companies are so rare that the best way to find new ones is to discover those recently made viable by change, and technology is the best source of rapid change. Growth is why it's a rational choice economically for so many founders to try starting a startup: growth makes the successful companies so valuable that the expected value is high even though the risk is too. Growth is why VCs want to invest in startups: not just because the returns are high but also because generating returns from capital gains is easier to manage than generating returns from dividends. Growth explains why the most successful startups take VC money even if they don't need to: it lets them choose their growth rate. And growth explains why successful startups almost invariably get acquisition offers. To acquirers a fast-growing company is not merely valuable but dangerous too. <<

No matter how many paragraphs one quotes from Paul Graham, it is very hard for an argument to evade the reality that the word "startup" was used in other ways before he wrote this essay.

It's common for people to have discovered a new concept intuitively without understanding all its implications. Like Newtonian physics. Aiming to redefine it properly is worthy.

Almost entirely unlike Newtonian physics

I've come to understand "startup" to mean that the company is the product.

I've come to understand a startup as a company that doesn't want to pay overtime.

Nah, that's pretty much the entire industry, even the ones that don't call themselves startups anymore.

That couldnt be more incorrect, from my own experience at least where i live.

Every salaries job I've ever worked has put me in as an "exempt" employee, paid for the job I do and not the hours I work, so not eligible for overtime. This includes non-tech companies who have been in business for over 100 years, across three states.

It's pretty standard when you're a salaried employee.

Counter anecdote, I was an exempt salaried engineer at General Dynamics, and got paid time and a half for every hour over 40, if I worked more than 45 hours per week.

It boosted my annual salary noticeably, because we worked 45-50 hours nearly every week. I hear that the OT policy still exists, but few people still get OT because of the DoD sequester. But in 2010-2012, it was very nice.

That's completely up to the discretion of your employer. The reason for classifying an employee as an exempt employee is to exempt them from the Fair Labor Standards Act, usually with the goal of excluding them from demanding overtime pay. I'm not sure what the benefits are for classifying someone as exempt but then still giving them overtime pay.

I ask you for greatness and this is the comment you leave?

If you have enough employees to need a full time HR person, you're not a startup anymore.

Seeing as the average life expectancy of a Fortune 500 company is 40-50 years[1], it's not unreasonable to consider a 6-year-old company to still be in the "starting up" phase of its existance.

[1] http://www.businessweek.com/chapter/degeus.htm

Looking at it from this angle, one has to observe that we not only do have a terribly high infant mortality rate; many seem to be spawned with the sole purpose of becoming child sacrifice. (Moloch the Great Acquihirer).

well, you could argue that the startup business plan is to become profitable through outside investment rather its own business model. square fits this, their target group is still a single customer with a large sum of money rather than lots of customers with small amounts (aka a business).

losing money as an intermediary on financial transactions is not easy. banks and organised crime sure scratch their head looking at square.

Any company that has yet to be 'self sustaining' (which is to say a Going Concern in accounting terms) is a start up as far as I am concerned. Until it reaches the point where it generates enough money to keep operating without additional outside investment, it is in danger of going out of business when that outside investment ceases to be available.

There a loads of companies who don't need outside investment to sustain operations but take it anyway to "inject capital for growth". If I build a SaaS that nets (profit) me $5k/month for a whole year, does that mean it's not a "startup" anymore?

Indeed it does. The startup thing to do when faced with a $5k surplus is to spend $50k on marketing. Remember, you don't want to build a sustainable business, you want to make an exit or die trying.

>make an exit or die trying.

Or grow a sustainable business from something small to something huge that produces a lot of cash along the way while your enterprise value increases ahead of a large exit (or die trying).

If I build a grocery store with similar net profit, revenue, etc, is it a "startup"? why should your SaaS be?

The term is not well defined, and basically meaningless; but I think a definition that would resonate more closely with most people is "a company whose meta-strategy is to expand like crazy, whose strategy is flexible, and who is not yet an industry pillar".

Being a startup or not doesn't protect you from poor management choices :-). Companies that don't need outside investment any more are no longer start ups. Getting some additional capital to expand it not fatal if they can't secure it, they just can't expand. For a start up if they can't close the next round of funding, they die.

Answering the next question is a bit trickier. You said "nets (profit) me $5k/month" which can be interpreted in a number of ways. So I'll answer with the two most common interpretations.

If you're SaaS business can pay you and anyone else needed to run it, a salary and some benefits, and at the end of the year, after accounting for depreciation of assets, expenses, and taxes is $5K in the 'black' (so the LLC, S-Corp, what have you, could 'bank' that $5K for future expansion) then no it isn't a start up any more. It may be a boutique business but its a going concern.

If you run a SaaS business with no employees, and use the revenue to pay your living expenses, have no benefits and you happen to end up with $5K unspent at the end of the year, its more of a consultancy than a startup.

Good examples in an adjacent field are accounting companies versus accounting consultants. My mother-in-law ran her own little tax accounting business for years. Not a startup (it was self sustaining) but not large either.

Remember, you're quoting from a newspaper. Word "startup" in tech crowd (and thus, in media) means "sexy", "hip", "new", "innovative", and is a label you wear to associate with the sexy crowd (as opposed to the old, fossilized world of typical companies and corporations). Some of the features of this community are:

- the thing to brag about at meetups is not profit, but investor money taken and burned

- you need to grow very fast, because it's how you get investor money

- you ain't going to have a profitable business anyway, so you need to have a plan to sell your soul (and users), aka. "an exit"

- working overtime for free is justified, because "startup!"

etc.

But the primary reason for calling yourself "a startup" seems to be the association with "sexy and innovative crowd". You lose the label when you've been around so long that you make a profit and have other startups competing against you.

Evidence: I don't see companies bragging about being "Small Businesses", which would be a legal term.

It would be better to demolish the hip/sexy part of the 'startup' phrase in mainstream media. Recently I've started to put more emphasis on the definition that Dave McClure gave on quora about a year ago:

    A 'startup' is a company that is confused about:
    - What its product is.
    - Who its customers are.
    - How to make money.
    As soon as it figures out all 3 things, it ceases being a startup and becomes a real business.

http://www.quora.com/What-is-the-proper-definition-of-a-star...

I think this is really a clever way to define a startup, it is true to the experience, and takes away the hype.

I have had this brilliant idea of a start-up. A website that has one big button saying start-up, and it costs $1 to press, and voila you have your own start-up. So...who's in?

Nonono that's not how it works. First you register a hip-sounding .io domain name, fill it with some random blurbs of cool text in a Bootstrap layout, and post it on HN as 'Foobar.io; X + Y for Z', where X/Y/Z are random keywords taken from a list (x and y being other cool successful (former) startups).

Then you pivot half a dozen times whilst getting investor money, which you whisk away to your private accounts in tax havens, then after 1-3 years you get acqui-hired by Google, Facebook, or Twitter.

That sounds familiar, except for the private accounts part. Has it ever really happened that an investor-funded startup was embezzling money in private accounts? I've never heard of that happening, it would be a major scandal if it had, wouldn't it?

It is trivially easy. It is also illegal.

Take any service or product needed, from office space to hosting to headhunter. Have a middle-man provide that service, and provide a kick-back / incentive / referrer fee to the person choosing the service or product needed.

Again, it is illegal, possibly fraud possibly other, and certainly not unique to startups. Things like competitive bidding attempt to mitigate this risk, as do knowledgeable advisors to investors. And many other methods.

If somewhat foolish as one's personal reputation could be dashed in an instant, a VC/PE firm managing other people's money may not like having their own gullibility publicized in equal measure, leading to an under-the-carpet affair, or something else.

It's not impossible, it can definitely be done through asset acquisition at higher prices, or contracting some dubious consulting agents/firm.

but but....:(

The definition of a startup (from PG?) sums up to a company that favours growth over profitability. For instance, a company like Square that keeps raising money to accelerate instead of taking profits.

But that definition would include Amazon. I don't think a company founded in 1994 and went public in 1997 can be considered a startup.

"A startup is an organization formed to search for a repeatable and scalable business model." - Steve Blank

http://steveblank.com/2010/01/25/whats-a-startup-first-princ...

> repeatable

Yeah, they've done that. If you do an exit and kill the product, the original need of users is left unfulfilled, so there's a space for someone else to do the same trick again.

Peter Thiel defines a startup as such in Zero to One - A startup is the largest group of people you can convince of a plan to build a different future.

So is that different future one where there will be further penetration & distribution of existing Square products or will we continue to see Square more horizontally integrate services for businesses? I personally think they have lacked a clear vision over the past few years but have reshaped it and resold that to investors for a valuation 2x from 2yrs ago.

I don't really understand the payment-company wars. Living in Europe, I can instantly wire money to anyone in the EU for free, so I'm wondering if companies like Square are solving a problem that uniquely exists in the US, or whether I've got the wrong end of the stick.

Does this have to do with the predominance of credit cards in the US otherwise (a relatively uncommon mode of payment where I live)?

Seems to me like a high value for a problem that I can't relate to.

> Does this have to do with the predominance of credit cards in the US otherwise (a relatively uncommon mode of payment where I live)?

Likely, and the same problem exists in European countries with significant CC[0] penetration (e.g. France, or Iceland where cash marks you as a tourist and I've seen people buy a single packet of gum on card): you have to request a quote from a payment processor, the first link I get (EMS) tells me to "request an offer or contact the sales team".

[0] leaving it for posterity, but I actually meant "cards-based payment" rather than "credit card": the payment processor issue applies to both. It is true (in my experience) that euro countries tend to use debit cards rather than credit cards.

Is it really that common to payment with credit card in France? I'm assuming that's only the case in Paris? I regularly buy stuff on card, but always debit if I can help it, and I would assume that that's also the case in the France.

I grew up in The Netherlands and I'm living in Italy now, and credit cards are generally viewed with suspicion. I didn't get a credit card until a few years ago when I needed one to live in the US.

A lot of people that I know are uncomfortable with credit cards. I'm guessing that's because they're associated with fraud; banks here don't make it easy to file reports in general. My card was used fraudulently for the first time a few months ago and it took A LOT of paperwork for my bank to accept that I hadn't made the purchases.

I've always wondered if it's a coincide that Paypal, Square, Google Wallet, Apple Pay etc. are all US-based, or whether it's because they don't address a significant pain point this side of the Atlantic.

I can assure you that CC payments in France are everywhere (and not only in Paris). I also regularly travel to Italy, and agree with you: Cash is preferred once you cross the border.

> Is it really that common to payment with credit card in France? I'm assuming that's only the case in Paris? I regularly buy stuff on card, but always debit if I can help it, and I would assume that that's also the case in the France.

France doesn't really make a difference between "credit card" and "debit card": it's essentially an implementation detail of your card's contract, the former is called "deferred debit" and the latter is called "immediate debit" (or "direct debit").

I believe the latter is indeed much more common than the former (and the default), but even it can have credit-ish characteristics in the form of overdraft (with variable depth and interests, and banks may waive part of the overdraft fees under a certain amount, mine did when I was there).

My point was more about card-based payments in general (as opposed to cash, bank transfer or cheques) than specifically credit-card and cards are definitely extremely common in france (though not absolutely ubiquitous).

CCs are not popular in my part of Europe because they're effectively shark loans. you get smacked by the bank for withdrawing money (high interest rates), you get smacked by the bank for not withdrawing money (high fees that only go away if you withdraw). either you have the money and then you don't have to borrow from the bank (and pay through your nose), or you don't have the money and then using a CC is a short road to forfeiture.

Just a slight correction, it's debit cards that are common in France and not credit cards. But yes indeed, at least in Paris, a lot of people buy everything with debit card (you can buy as low as 1€ by debit card in big chains).

Yes I really meant "cards" rather than specifically "credit cards". An AFAIK France doesn't really make a difference between debit and credit cards, that's a concern between clients and their banks.

Its also a concern btwn the end user and the card. Credit cards, bc of the inherent line of credit and their ability to accommodate you into a large amount of personal debt, free the end user up to become a consumer beyond their means. Debit cards don't. I think a lot of what you're talking about, in terms of payment issues in the US, stem from this.

We're spending money that hasn't been earned yet, and there is a lot of space to disrupt that as the industry is held by legacy companies who give out credit.

> Its also a concern btwn the end user and the card. Credit cards, bc of the inherent line of credit and their ability to accommodate you into a large amount of personal debt, free the end user up to become a consumer beyond their means. Debit cards don't.

To an extent, overdraft is a thing on debit cards.

> We're spending money that hasn't been earned yet, and there is a lot of space to disrupt that as the industry is held by legacy companies who give out credit.

But Square isn't in that business, they're in the business of ferrying money between the consumer and the provider of goods and services.

> a relatively uncommon mode of payment where I live

This differs a lot within Europe. In Scandinavia cash is really uncommon.

EDIT: Ok, so you're talking about debit versus credit card? That's a different story but then I don't understand how you see Square as US centric. It applies to debit cards as well as credit cards. The reason it won't work in Europe is because most countries here require chip (see iZettle for a competitor with support for chip).

Ah ok yea thanks for clarifying that. I was under the impression that Square only works with credit cards. I can understand I guess the convenience of using a small card reader attached to your phone instead of a bulky POS terminal.

I guess what's more difficult for me to understand is the value surrounding wiring money. My bank in the Netherlands doesn't charge me a fee to withdraw money at any ATM in the world and I can transfer to any European account given the IBAN free of charge too.

So just curious as to what pain point Square and other payment companies serve in that case.

SEPA wire transfers are actually not processed instantly. Banks are allowed to take up to one working day. Also, there are still numerous banks that charge a fee per transaction.

> Also, there are still numerous banks that charge a fee per transaction.

I think that's the rule rather than the exception.

Where? Certainly not in Germany.

I think he meant cross-country transfers, i.e. when you use IBAN. They are not free, as far as I know, in Czech Republic and Slovakia, both being a member of Schoengen zone, Slovakia even has Euro.

Ah that's interesting. All transfers that I've done within the EU have been free of charge thus far, but I haven't transferred anything to Czech Republic and Slovakia. Wonder if that's a local banking policy.

International fee must be the same as national ones in SEPA.

This means that if your bank charges 0€ for national transfers, it cannot charge for SEPA ones (the ones with IBAN). But it could in theory charge for national and SEPA wires.

http://en.wikipedia.org/wiki/Single_Euro_Payments_Area#Misco...

Banks are not longer allowed to charge for transactions within the Euro zone.

Apple Pay is certainly a threat to Square, but I'm sure Apple doesn't care about POS terminals and that's a pretty huge market on its own.

On top of that, Square Cash is right now the absolute easiest way to send somebody money. Just a moment ago I sent a friend $45 in less than 60 seconds with a single email. Instantly I'm emailed back with a confirmation that the cash will be in his account in 1 or 2 days. In my experience he'll have the cash tomorrow.

Relevant: https://twitter.com/jack/status/509413534862544896

Our millions of sellers will be able to accept any form of payment that comes across the counter, including Apple Pay!

Right but I just mean, their bread and butter has been a card reader. I personally am looking forward to abandoning card swiping as much as possible.

It's a big but difficult market. Beyond mom-and-pop shops it becomes more and more like enterprise software with expensive sales and support costs.. only without the enterprise margins.

I wouldn't say Apple Pay is a threat to Square Register. If anything it might even drive POS upgrades which Square could benefit from. Having said that, Square does need to diversify beyond POS systems and payment processing, and Apple Pay puts another nail in the coffin of Square's foray into payment instruments (Square Wallet), which they already pre-emptively killed.

Unfortunately Square Cash operates at a loss. If it were possible not to operate at a loss there'd be a million competitors overnight.

And with the being said, is 6B really that unrealistic of a buying price for Apple to get a quick jump in share of the market? Or for that matter any of the other competitors in the Apple scale space knowing they need to accelerate their offerings in light of Apple Pay?

In Canada, we've had Interac providing transfers for a number of years. All you need is the person's email address or mobile number and you can send them money with the ability to specify a passphrase to pick it up. Once picked up, the recipient has access to the cash instantly. No delays and, in my experience, no fees either... though that's subject to whatever banking plan you have.

http://www.interac.ca/index.php/en/interac-etransfer/etransf...

Not entirely sure how different it is in the US but I (UK) can send money from my bank account to a friend's one and he/she gets the money in less than 20 seconds.

But wouldn't you and your friend have to exchange bank account numbers?

An advantage of Square Cash is it uses email as a proxy, and you probably already know your friend's email.

You need to know the sort code / account number you're sending money to which is written on the cards the first time, after that it's already saved in my bank portal and I can just select them

Somewhat tangental, but I think it's incredible that 1 or 2 days is 'the absolute easiest way to send somebody money.'

You can put $45 in an envelope and have it delivered in 1-2 days.

>I sent a friend $45 in less than 60 seconds with a single email. Instantly I'm emailed back with a confirmation that the cash will be in his account in 1 or 2 days

Welcome to Europe 15 years ago

I get the feeling that what Square is doing now is just a glimpse of their greater plan. They have a proven ability to execute and release polished products that are enjoyable to use.

Nearly everyone I every need to pay is on Square Cash (and those who aren't soon are, the barrier to signup is very low) and the app is just a pleasure to use compared to the competition. It's second nature at this point.

Most people I know are on Venmo - is square cash better?

I prefer it a lot more. Maybe it's just my circle of friends, but we laugh at how stupid Venmo's Facebook spam is and generally prefer how easy Square Cash is to use. Since the money ends up right back on your debit card, it's a lot easier than maintaining a Venmo balance and having to deal with that.

I signed up for Venmo a while back to try their API at a hackathon. They then decided to freeze my account and send me a barrage of questioning. I didn't bother.

So why not just use PayPal? I've paid people through PayPal on the spot and many small businesses seems to access it.

Square cash has absolutely zero friction - you can download the app on your phone and be sending payments to other people in a matter of minutes, without needing to know anything other than their phone number.

On top of that, Square Cash is instant - there's no paypal balance to deal with, it doesn't take 2-3 business days for the ACH deposit into your bank. When I square cash my friend $50, it's in his account and out of mine before our conversation is over.

venmo feels like its trying to be a facebook app, broadcasting payments, etc. I want the app im using to send money and nothing else - cc square from a normal email is so much less intrusive.

Square will also be releasing an update to cash with invoicing, reporting, etc. Can't wait :)

Big potential in the added services Square will provide to SMEs. On top of reporting, I think they've already floated the idea of feedback through digital receipts.

I'd definitely imagine that improved customer feedback mechanisms would impact SMEs in a positive way.

You have to hope there's a greater plan, because the one right now is "somehow contrive to lose piles of money at being a financial intermediary".

Square Cash, Square Capital, Square Market, Square Stand, Square Register, Square Reader. Add the recent Caviar acquisition to the spaghetti on the wall.

None of those solve the "somehow contrive to lose piles of money at being a financial intermediary" problem.

In fact piling on more products that lose money accelerates that plan!

The goal could still be to get as many Square POS systems onto the market so that a competitor (ie. Amazon) can't just waltz in and start expanding aggressively.

Amazon, Google, etc. can afford to give away POS systems for longer than Square can stay solvent.

Square's POS is also free

Does Square have the margins Apple or Google have that would allow them to give them away for free forever while not making a profit?

Are any of its businesses outside of the POS system successful? Where is it losing all the money?

Don't compare it to the competition. I live outside SF and have never run into any square POS till now and don't know anyone that uses square.

is POS even successful? Seems like half the places that used to have it have switched to other companies.

Cold water:

Square Wallet was a big dud, as was the Starbucks partnership. That was their "greater plan" at one point.

Square Cash is easy to use.. but operates at a structural loss of over 20 cents per transaction.

There's plenty of issues when you look past the surface, particularly with the business model. They have not yet delivered a polished product that's enjoyable to use and makes lots of money.

Agree. Not to mention Square doesn't exactly have a monopoly on "making useful things that users love", not by a long shot.

If "proven ability to execute and release polished products that are enjoyable to use" is the bar for a high valuation and optimistic projections, we should maybe start throwing gobs of money at a lot of design firms and app consultancies.

It's too bad about Square Wallet, I really liked that product, I don't know why it didn't take.

What did you like about it? I forced myself to use it a bunch but in the end felt it didn't save me any time over swiping and signing.

By the time you unlock your phone, open the app, wait for it to locate you, check in, say "hey i'm paying with square my name is x", wait for the cashier to scroll down and find you (sometimes you take a few seconds to show up), and wait for them to tell you you're good to go... it's really at best neck-and-neck with swiping and signing. At worst, slower and more awkward. Auto check-in was super unreliable.

Apple Pay on the other hand is going to be a significantly faster way to pay (no signing/PINs) and also vastly more secure (no real card numbers!). Two real concrete benefits.

> What did you like about it?

An easy way to see everything I've ever spent at a place.

Not having to share credit card details.

You can pay just by walking into the place and saying your name, you didn't have to have to pull your wallet out at all.

Also nobody would use Square Cash over a plain bank transfer for a domestic (or more generally fee free through their bank) transfer, rationally speaking? PayPal have a product that is good enough unless you do such transfers really often to care enough, do they change something fundamental or are they left literally competing on fees with PayPal?

I disagree that PayPal is good enough. To receive money via PayPal you have to link your bank account which takes verification and can be a PITA. Square Cash "refunds" it directly to your debit card. You just type in the number. It's also usually easier than using your bank's EFT interface to send money.

However this debit mechanism is also what makes it so expensive for Square to operate (>20 cents per transaction in interchange fees).

Completely on point - I don't think people realize the scale you need to achieve to make money in the credit card fee transaction business. Billions and billions are required. To me the more interesting question is who will buy them.

> They have not yet delivered a polished product that's enjoyable to use and makes lots of money.

The small business I work for recently switched to Square Register via an iPad and the Square Stand for all POS and it's pretty brilliant. It's a big step up from using a phone plus the regular little reader, and setup and use are quite simple even for our tech-illiterate employees. Judging by the popularity of the related receipt printer and cash drawers on Amazon, we're far from the only ones to make this jump recently.

I don't know how much money they're making per $100 stand, but they've made the barrier to a modern flexible POS system so low that I'd be surprised if their share of the payment processing pie isn't growing quickly.

It's not the stand they make money on, it's the 2.75% payment processing rate. That is higher than what competitors charge (closer to 2%), and as business grows that can add up to a significant premium. That is what drives them off of Square. So there's a kind of glass ceiling there.. to keep those customers Square would need to renegotiate a lower rate that trims down their gross margin.

Square does have a really good niche in the mom-and-pop shops where 2.75% is an ok price given the easy of signup and free POS system. But at the same time there may be significant customer acquisition and support and fraud costs in that niche.

Looks like they blew past their valuation projections from 2011:

http://www.pitchenvy.com/gallery/square-pitch-deck/

I wonder how this kind of money raising impact employees? (compared to going IPO)

For those that own stock or options earned and vested, it's a weighty validation about the value of that asset. Assuming the there is a core of early programmers that collectively own 5-15% of the stock but are not involved in the financing side of the business, I am sure they feel differently following this investment/valuation. A 0.1% stake is a big deal now.

IPOs of this decade in tech seem to be a different beast. Much bigger. Companies seem to be successfully raising large (+100m+) sums without going to pubic markets.

Understanding the implications of this is beyond my pay grade, but I imagine there are some complex relationships with early employee and investors. IPOs allow stockholders to cash out and the company itself to raise capital. Companies have an alternative way of raising capital which many now prefer. I imagine that all demand for their stock from later stage investors can be channeled into to company's coffers this way without dilution by stockholders.

Either way for employees that have some tenure at Square, being now valued at $6bn is much better than being valued at $600m or $60m.

When Square will open their platform for Indian Users ? Any Idea ?

Totally unrelated: $6B is Bitcoin's market cap times 15.

Edit: "... times 1.5."

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