Jack Dorsey’s mobile payments player Square files for an IPO

15 Oct 2015

Jack Dorsey

Whatever way you look at it, Jack Dorsey occupies the most unusual position in Silicon Valley. The newly-appointed CEO of Twitter is also the CEO of Square, an electronic payments player that has just filed for an IPO, which means he will soon be CEO of two of Silicon Valley’s hottest publicly listed tech companies.

Square yesterday filed a Form S-1 with the US Securities and Exchange Commission and intends to list its stock on the New York Stock Exchange under the ticker symbol “SQ”.

The company is being advised by Goldman Sachs, Morgan Stanley and JP Morgan.

Square was founded by Twitter co-founder and newlyappointed CEO Jack Dorsey in 2009 to enable anybody with a mobile device to accept card payments anywhere and at any time.

‘The strength of this business is more than the money it generates’

In its prospectus, Square said its mission is to “democratise commerce” and level the playing field for players of all size.

By 2014, sellers from businesses of all sizes had processed some US$23.8bn from 446m card payments from 144m cards. In the prospectus, Square revealed its vision for transforming commerce, including end-to-end processing services, payroll services and marketing services, to name a few areas.

During the first half of 2015, Square reported revenues of US$560.6m and a loss of US$77.6m compared with revenues of US$371.9m and a loss of US$79.4m a year earlier.

Dorsey holds a 24.4pc stake in Square with the next largest shareholder being Khosla Ventures with a 17.3pc stake and co-founder James McKelvey has a 9.4pc stake. Other shareholders include JPMC Strategic Investments, Sequoia Capital and Rizvi Traverse.

Born of necessity

In a personal note, Dorsey recalled how Square was formed when his co-founder McKelvey couldn’t accept a credit card payment for his art and setting up a merchant account proved to be a painful experience.

They built a working prototype using a mobile credit card reader that plugged into the audio jack of an iPhone and Square was born.

“Creating more inclusion and greater equality in the global economy is both a social need and a huge business opportunity. We’ve made it our purpose: empower people with beautifully simple tools that give them an advantage where they previously and unfairly had none. Our strategy to realise that purpose is straightforward: grow our payments service, extend payments into financial services, and extend payments into marketing services.

“We’ve built one of the fairest and most efficient payments businesses in the world. We made it possible to accept card payments in less than five minutes. We priced all payment cards at the same flat rate and eliminated complicated fees. With Square Cash, we’ve built a network that works for both individuals and businesses, online and offline. We believe sellers should be able to accept any type of payment, from cash to cards, Apple Pay to bitcoin, and whatever the future may bring, so they never miss a sale.

“The strength of this business is more than the money it generates,” Dorsey promised.

Jack Dorsey image by Joi Ito via Flickr/Creative Commons

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years