According to a filing obtained by VCExperts, Square has raised another $100 million in capital. The company authorized 6.4 million Series E shares, according to the document, at a per-share price of $15.46.
Square has raised incredible amounts of money. The company has raised hundreds of millions of dollars, has a nine-figure credit line and, now, a fresh $100 million traunch to use.
The company lost around $100 million in 2013, and it isn’t clear how much cash the firm had on hand before the new capital injection. Square was reported to have $155 million in cash at the end of 2013, a figure that was recorded, of course, before its debt event that took place earlier this year.
Square declined to comment on how it intended to use its new funds, specifically whether the monies were earmarked for acquisitions, or operational expenses.
The new share price values Square at $6 billion, up from its recent $5 billion valuation that was set during a secondary offering of its shares earlier this year. As TechCrunch reported at that time, Square’s valuation has grown as its payment volume has increased. As time has passed, Square’s valuation has fallen behind its payment processing rate: In June of 2011, Square was processing payments at a rate of around $1.46 billion per annum. Its valuation was $1.6 billion. Recently, Square was expected to process $30 billion in calendar 2014 while being valued at $5 billion.
In recent months Square has shown an appetite for acquisitions. The company recently pulled the trigger on a $90 million deal to buy Caviar, a food delivery service. The deal was executed with Square stock. Square could be linking up new cash to help it lock down other purchases. The company’s core business, processing credit card payments, has difficult margins, and increasing competition. Square wants to diversify its revenue supply.
Presuming that Square doesn’t need the $100 million to eat, it could deploy the funds across several purchases that would also include a stock component. Equity is great, but the short-term allure of cash is impossible to deny.
Separately, TechCrunch has heard from multiple sources that Square and Apple were recently in acquisition talks, but that Square walked away. Apple wanted the company to come aboard, according to one source, but the discussed price was a sticking point: The tipster held that Apple wanted to buy Square for less than half of the $6 billion valuation it eventually would raise at (around $3 billion). Square, valued at the time at a firm 66 percent delta to that price point, declined to accept.
Apple also showed Square a software register, restaurant and spa booking services and a payment system for iPhones said the same source. This did not sit well with Square execs, who felt like the products would compete with their own offerings.
Apple recently announced Apple Pay, a way to execute in-person payments with your phone.
Square has long been rumored to be heading for an IPO. That offering hasn’t happened due to, it’s usually said, revenue growth concerns at Square, and the same adverse market conditions that have sidelined other offerings.
H/T: Josh Felser of Freestyle Capital pointed out that in the paragraph concerning Square’s payment processing rate, and its valuation, I managed to argue against myself accidentally. The text has been corrected to correctly indicate what I was trying to argue.