Dive Brief:
- Payment processing company Square has filed for an initial public offering, reporting a loss of $77.6 million on revenues of $560.6 million for the first half of 2015.
- Net losses were down in Square’s second quarter to $29.6 million, but the company may not reach profitability for some time.
- Revenues from Square’s partnership with Starbucks contributed $62.9 million to the company’s bottom line in the first half of 2015, up from $56.6 million in first- half 2014.
Dive Insight:
Square filed for an IPO on the New York Stock Exchange, revealing improved numbers in its S-1. The company’s initial plan is to raise $275 million, which, along with ample cash reserves and access to a $225 million credit facility, should leave it well-capitalized for growth and diversification into areas such as data targeting and business lending services.
Listed among the risk factors in Square’s filing is Jack Dorsey’s role as CEO. Dorsey was recently named the CEO of Twitter, too, and helped found both companies; there are concerns he will no longer be able to devote sufficient attention to the payments company. Dorsey is currently Square’s top shareholder, with 24.4%.
Leading two huge tech companies may be a problem, but Dorsey has shown a willingness to delegate tasks to senior executives at Twitter, including COO Adam Bain. At Square, Dorsey’s second-in-command is CFO Sarah Friar, a former Salesforce executive and financial analyst at Goldman Sachs—the investment firm leading the company’s IPO.
