Square Inc., which makes small, square-shaped credit-card readers, just closed a round of venture financing for $150 million, according to the New York Times' Bits blog, raising the company's value to $6 billion, a source said.
That valuation ranks Square with other popular Internet startups such as social network Pinterest and music-streaming service Spotify. The latest round of financing, led by the Government of Singapore Investment Corporation, also included Rizvi Traverse Management and Goldman Sachs, the report published Sunday said.
The San Francisco company said in a Securities and Exchange filing last month that it planned to raise at least $100 million. Square confirmed that it had closed a round of financing but didn't offer details on the transaction.
Apple Inc. said last month that it would include a new payment product in its iPhone line, Apple Pay. Meanwhile, ebay Inc. announced that it would spin off its profitable PayPal payments business amid growing competition in the payments industry.
Facebook Inc. is also reportedly working on a payment feature for its Messenger mobile app, and Amazon.com Inc. introduced its own square-type, credit-card reader in August. Amazon is expected to undercut Square’s business for the long term, highlighting the company's challenges: All of its Silicon Valley-based competitors have a lot more cash behind them. PayPal is also marketing more heavily its own credit-card reader, PayPal Here, as well as a small cash loan service, Working Capital.
But Square has become popular in the past six years by offering a free reader to small and medium-size businesses such as hair salons and mobile food trucks, charging 2.75 percent of each transaction. The company, founded by Twitter Inc.'s Jack Dorsey, said it plans to include EMV chip technology in a new reader in 2015. It will also take Apple Pay payments when the service launches this month.