Digital payments company Square has finally filed public documents for an initial public offering that reveal previously closely guarded details about its business.
Since its founding in 2009 by Jack Dorsey (remember, he now has two CEO jobs) and Jim McKelvey, Square has become best known for credit card readers affixed to iPads that merchants use to ring up customers. To date, the company has raised nearly $600 million in venture capital funding from investors such as Sequoia Capital and Kleiner Perkins Caufield & Byers.
But over the years, Square has also jumped into other lines of business including cash advances for small businesses, food delivery, and peer-to-peer money transfers. Until now, it wasn’t exactly clear how well any of these efforts were doing. Here is some of what the filing showed:
- A $77.6 million loss on $560.5 million in revenue for the first six months of this year
- Ninety-five percent of its revenue comes from point-of-sale services like handling payments for merchants
- Square accepts 95% of sellers who apply to use it to payment processing
- It processed $23.8 billion in payments in 2014 alone
- Square Capital has disbursed $225 million in cash advances to businesses since debuting in May 2014
- Risk and fraud losses represented 0.1% of gross payments volume in the 12 months ending in June 2015
- Square processed 446 million individual payments from 144 million cards in 2014
- Retail businesses make up 21% of Square’s merchants, followed by services at 17%, and food businesses at 15%
- The tiniest sellers (processing less than $125,000 in payments per year) represented 92% of its merchants in the second quarter of 2011, compared with 63% in the same quarter this year— meaning that its stable of large customers has grown, relatively speaking
- Square’s deal to handle payments for Starbucks (SBUX) is a money loser. Square lost $28 million from the partnership in 2014, and $14.3 million in the first six months of 2015 (luckily for Square, the relationship will end by October 2016, if not earlier)
- In combined marketing and advertising costs, Square spent $61.9 million in 2014, and $36.4 million in the first six months of 2015
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