Mobile payments titan Square has just concluded another major financing round, this one generating $100 million, enough to effectively propel the company’s valuation past the $1 billion threshold.
Led by Kleiner Perkins Caufield & Byers, the substantial new financial backing in Square makes an even bigger Silicon Valley star out of Square co-founder and Chief Executive Officer Jack Dorsey, perhaps still most famous for being the inventor of Twitter.
“Square’s rapid ascent shows how technology valuations continue to climb,” writes Monica Langley of the Wall Street Journal, “despite widespread critiques that the values are not economically sustainable.”
Mr. Dorsey says he first got the idea for Square while visiting a friend in his hometown St. Louis a couple years ago. The friend, an artist who works in glass, had complained about missing a $3,000 sale because he couldn’t take a credit card. The two founded Square.
Still, not everyone believes mobile payments systems are immune from the overarching social media tech bubble we’ve reportedly now entered into.
“Its valuation is highly speculative and indicative of the bubble we’re in,” Forrester Research analyst Sucharita Mulpuru says of Square. “Established players want a crack at this, and could render the device and the company irrelevant.”
Still, no shortage of analysts – including those at tech consultancy Yankee Group – believe that mobile money is becoming an industry so big we may not presently be able to estimate the true scope of its eventual reach.
Yankee Group forecasts that the total value of global mobile transactions will hit $984 billion in 2014, a massive jump from $162 billion in 2010.
