Square raising $200M, partly from Government of Singapore Investment Corporation, at $6B valuation
In raising cash, Square heads for $6B valuation: Sources — Square, the payments provider that turns any smartphone into a credit card terminal, is in the process of raising capital …
Context & Ripple Effects
Square's valuation has doubled roughly every two years on paper: a $1 billion round led by Kleiner Perkins in 2011, then a $200 million round at $3.25 billion in 2012, and now a reported $200 million raise at $6 billion with the Government of Singapore Investment Corporation participating — though the current round remains unconfirmed, with Re/code and VentureBeat both picking up the report.
The raise lands during a rough stretch: reporting earlier this month put Square's cumulative losses around $100 million even as Jack Dorsey pushed a broader finance vision, and the company spent August shoring up its story — a blog post rebutting negative myths, a confirmed Victory Park Capital deal to fund its expanding small-business cash advance service, and a Cash app update adding text-based payments.
First-order effects
- If the round closes as reported, Square banks $200 million while nearly doubling its valuation from the 2012 mark, with a sovereign wealth fund rather than a traditional VC taking a marquee position.
- The fresh capital arrives just as Square scales its cash advance lending program, giving it balance-sheet room to grow a business it began funding through the Victory Park Capital deal days earlier.
Second-order effects
- Rivals in mobile payments and small-business lending now face a competitor that can underwrite merchant advances and subsidize hardware from a $6 billion-marked war chest, pressuring them to match on financing terms rather than just reader pricing.
- A sovereign wealth fund leading into a consumer-payments startup signals that late-stage growth capital is available outside Silicon Valley's usual funds, raising the bar for what competing startups must show to command similar marks.
Third-order effects
- The pattern — valuations doubling between private rounds while losses mount — points to payments companies staying private longer and funding expansion through debt-like products such as merchant cash advances instead of public markets.
- Sovereign wealth funds moving down into growth-stage fintech would make late-stage financing a global contest for deal flow, structurally changing who sets terms for companies at Square's stage.
The trend: Late-stage private financing is shifting from venture firms to sovereign wealth funds, letting payments startups like Square keep doubling valuations and scaling lending businesses without going public.