Mobile payments company Square, which is corporate venturing backed by credit card company Visa, is reportedly close to securing roughly $200m in funding which will see the company valued at $3.25bn, but falls short of the $4bn to $5bn valuation it had sought.
Private equity investor Suhail Rizvi is leading the round, according to news provider New York Times that cites sources familiar with the deal.
Square, created by Twitter co-founder and chairman Jack Dorsey, last year secured a $100m investment led by venture firm Kleiner Perkins Caufield & Byers, which led to Square being valued at $1.6bn, the New York Times said. Other backers include venture firm Sequoia Capital, investment manager Tiger Global Management. Visa also backed the company last year in a separate round.
Other backers of Square are venture capital firms Khosla Ventures and the Virgin Group’s Richard Branson. Square had raised more than $140m before the present round.
Square offer a new method for mobile payments. Their product, a square shaped credit card reader that plugs into a headphone jack, allows individuals and small vendors to accept credit card payments through their smartphones or tablets. The company provides both the reader and subsequent software free, but charge users 2.75 percent of each transaction.
In the first six months of 2012, Square has seen its user base double to two million. If its rise were to continue, Square can expect to process roughly $6bn in transactions this year.
Suhail Rizvi is the head of Rizvi Traverse Management, a private equity firm which has also made investments in social networks Facebook, Twitter and adult magazine Playboy.