Square has officially filed to be a publicly traded company, after months of speculation.
The payments startup is one of the biggest financial technology upstarts in the industry, and was last valued at $6 billion in Oct. 2014. The company will be raising $275 million in its IPO, according to an S-1 filing made public earlier today.
Jack Dorsey was recently named the permanent CEO of Twitter, a company he helped found. Dorsey also co-founded Square and serves as its chief executive. Now that Dorsey is running two companies, some have wondered whether investors might find Square’s IPO less appealing.
In its filing, Square acknowledged the potential risks of Dorsey running two companies at once. Among the company’s risk factors listed in the document, Square says ”Jack Dorsey, our co-founder, President, and Chief Executive Officer, also serves as Chief Executive Officer of Twitter. This may at times adversely affect his ability to devote time, attention, and effort to Square.”
While Square has been increasing revenue, losses have been piling up as well. In the first six months of 2015, Square’s total net revenue was $560.6 million, up 51% over the same time period in 2014. Square’s losses reached $77.6 million during the first six months of 2015, down from $79.4 million during the same period in the previous year. Square posted a net loss of $154.1 million in 2014.
But as you might expect from any company filing for a public offering, Square still sees plenty of opportunity ahead. For example, the US in the midst of transitioning away from credit cards featuring magnetic stripes and toward chip-enabled cards known as EMV that are considered more secure. That transition is expected to ramp up this month, courtesy of a new rule that went into effect on Oct. 1 putting merchants on the hook for credit-card fraud if they haven’t upgraded their equipment to allow acceptance of the new chip cards.
Square argues that the upgrade cycle set off by the shift toward chip cards in the US offers an opportunity for Square to sell its equipment and service to retailers. “We believe this represents a significant opportunity to add new sellers and gain market share,” Square wrote in its filing.
Square will be trading on the NYSE under the ticker SQ.