Why did Singapore invest in payment app Square?
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The mobile payment startup Square has secured funding for $150M, putting their total valuation at $6B, and the bulk of the funding comes from the government of Singapore

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Information was recently leaked about mobile payment platform Square acquiring Series E round funding in the amount of $150M. The tip was leaked by what the New York Times claims to be an anonymous but reputable source. A spokesperson for Square confirmed the funding round, but declined to comment on the amount, valuation, or investors. After this round of funding, if all numbers released by the anonymous source are correct, the company’s total value will climb to $6B.

“We stand for independent businesses and will continue to invest aggressively to empower them with tools that help them grow,” was the only official comment that the spokesperson for Square offered.

Square, which was founded in 2009 by Jack Dorsey and McKelvy, originated as a mobile payment app with a unique dongle that merchants could attach to their phone to accept credit card payments. In recent years, the platform has expanded to combat heavy competition from titans such as Amazon, Paypal, and Apple, who have released similar card reader concepts. New services that Square launched included Square Capital, Square Order, Feedback, and Square Wallet, an app that allowed users to check into locations then pay for purchases through the app, which they later pulled off the market due to unpopularity.

Though the platform processes tens of billions of transactions every year, Square has been seeing a decline in profit, something to the tune of $100M last year. Though the recent funding could put them back on top of the competition, they’re going to have to use it wisely.

Why Singapore?

The recent Series E financing round is being lead by the Government of Singapore Investment Corporation, and will include sizable contributions from Goldman Sachs and Rizvi Traverse Management, which have all contributed to Square funding in the past.

The Government of Singapore Investment Corporation, now known as GIC Private Limited (GIC), is the new kid on the block for this round of funding—and has some people talking. The company, which is run by the government of Singapore, mainly chooses investment targets that include international real estate, money-market instruments, equities, and fixed income. GIC made some controversial investments during the subprime mortgage crisis in the U.S., including a $6.88B investment in Citigroup and participating in a consortium to acquire Transport et Infrastructures Gaz France (TIGF).

Though GIC has made tech investments in the past, few were as high profile as the recent funding round for Square. Many insiders speculate that Square sought the funding from GIC due to their dip in profit margins – but maybe GIC just knows something we don’t.

Square’s new release could make it more valuable than Pinterest

Square is set to introduce a new card reader that will be compatible with microchip-enabled credit cards and feature E.M.V. (short for Europay, Mastercard and Visa), a more secure form of processing credit cards that will likely become the new standard.

“Square has done a lot of risky if-it-works-it’ll-be-amazing stuff,” a person close to the company told Fortune. “But the current business is much more grounded and utilitarian, much less pie-in-the-sky.”

Square’s $6B valuation puts the company at the same level as other successful startups that are worth between $5B and $6B, such as Pinterest. It will just have to beat mega companies like Amazon to get there.

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Leilani Rose

About Leilani Rose

An accomplished and savvy writer with a background editing and developing both print and online content. Leilani is an artist at heart, with a passion for life and discovering unique
things in the world. “Yes” often leads to great adventures.

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