Square, the San Francisco-based mobile payments company led by the Twitter co-founder Jack Dorsey, announced on Monday that it had closed its latest financing round.
The investment, of about $200 million, values the start-up at $3.25 billion, people familiar with the matter have previously told DealBook. The company did not disclose the terms of the transaction in its announcement on Monday.
While several large venture capital firms, including Sequoia Capital and Kleiner Perkins Caufield & Byers, have led Square's past financing rounds, this deal featured less traditional backers, like Rizvi Traverse Management, a boutique private equity firm and a Twitter investor, Citi Ventures and Starbucks, which contributed $25 million.
The investment will help Square keep pace, as it rapidly increases its staff and prepares for international expansion in the coming months. Over the last year, the company has more than doubled its staff to more than 400 employees. Square, which is best known for its mobile credit card reader, also noted on Monday that it was processing about $8 billion in payments each year - roughly eight times the amount from a year ago.
Despite its impressive growth rate, the three-year-old start-up is still many transactions away from becoming a highly profitable company. It makes razor-thin margins on processing credit card transactions and it is still working on increasing the adoption of Pay With Square, an application that allows consumers to open “tabs†with local vendors.
