The application lifted the veil of secrecy, which has long been interested investors. Revenue for the first half of 2015 increased by 52% (from year to year) to $471 million, with $63 million of income was coffee chain Starbucks, which invested in the startup in 2012. As expected, the startup is not profitable — but in the first six months of this year there has been a positive trend. Loss slightly decreased compared with the same period a year earlier. If the trend continues, it will be a good signal for the market.
The date of the IPO and the capitalization is still unknown, but we expect that the placement will take place during the month, and the startup is valued at $7-8 billion. Square was founded in 2009. In the beginning provided only one product. Special reader and app that turn your smartphone or tablet into a full-fledged mPOS-terminal for payment by plastic cards. The solution has been a great tool for small and medium businesses.
The device itself was provided for free, the user paying only a fixed fee of 2.75% per transaction. Later to fight with clones and similar solutions from major players like PayPal and Groupon, Square began to develop, including through acquisitions of. Largely contributed to the development of a significant flow of investment from industry giants such as Visa, Citi, JP Morgan.
The company raised $600 million, and according to the results of the last investment round, the startup was valued at $6 billion. Currently the backbone of business are payment services, but Square is developing towards diversification, providing its corporate users of financial services, as well as offering services for internal accounting, business development and marketing. Among the growth drivers we highlight the increase in the number of customers in the USA, Canada and Japan, entering new markets, as well as the development of additional services and their monetization. The main risk is that external conditions.
The volatility in global markets may cause a decrease in investors demand for risky asset. Square manages startup founder Jack Dorsey, who currently is the largest shareholder in his hands about a quarter of the shares, which in our opinion is extremely important for startups, which every day faced with the uncertainties and often forced to radically change the strategy. In addition, Dorsey recently returned to the post of head of the microblogging service Twitter, co-founder of which he is not likely to be an indirect synergistic effect from combining the two posts. The success of one company will strengthen the faith in the second, as is the case with Elon musk heads Tesla Motors and SpaceX.
From the Square we expected typical for startups dynamics immediately after IPO. Amid extraordinary excitement the sharp rise in the early days (up to 60-100% from the IPO price), over time turning into a correction. In the long-term performance of stocks will depend on the state of the business and growth of financial and operating performance.