Square's many suitors

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Square's many suitors

  1. 1. Proprietary and Confidential April 11, 2014 With a famous CEO in Jack Dorsey, $200 million in equity financing and a newly secured $20 million line of credit— Square has the Silicon Valley buzzing with one question— what are they going to do next? Sell out to Google? Go for the IPO? Raise more money? The options seems endless and PYMNTS wants to help you understand them all. PYMNTS.com Tour of the many industry players courting Square Square’s Many Suitors:  A Silicon Valley Love Story
  2. 2. Proprietary and Confidential Google: The Rich Guy What to Love 1.Google reportedly is considering an $8 billion dollar offer, far north of the Square $5 billion valuation 2.Helps Google in its question to more efficiently gather customer informiation and target better adds. 3.Could offer valuable support for the struggling Google mWallet. 2 | Somewhat Less Appealing 1.Dorsey and Google estranged after Google’s attempt to purchase Twitter. 2.Google rumors are old hat. 3.“Jack does not want to sell to Google,” according to one insider quoted anonymously by Recode.
  3. 3. Proprietary and Confidential Apple: The Artist Less Appealing 1.Apple is widely considered an mWallet wild card. 2.Apple’s Square acquisition rumors have been rampant for years, but nothing has come of it. 3.Apple is more into developing services for its mobile devices than interested in offline solutions like Square 4.Apple has reportedly soured on the idea of acquiring Square What to Love 1.CEO Dorsey has commented that Square’s design aesthetic is similar to Apple’s and indicated he thinks they are a better match than Google. 2.Square’s hardware chief Jesse Dorogusker worked at Apple for more than eight years. 3.Apple has sold Square products in its Apple Store Locations. 4.Give Apple a necessary jump forward as it enters the mWallet race late. 3 |
  4. 4. Proprietary and Confidential Starbucks: The Run-Away Suitor Less Appealing 1.Howard Schultz left the Square board of directors after only I year. 2.Starbucks mobile app is a competitor for the Square mobile wallet because it allows consumers to pay with it. 3.Starbucks did not adopt Square POS technology and has used it only as a lower- cost processing service. What To Love 1.Inked a deal with Square in 2012 to have Square process all credit card transactions. 2.Starbucks also agreed to invest $25 million in Square and had CEO Howard Schultz sit on Square’s board. 3.Was hoped to offer Square access to the larger Starbucks network and exposure for the Square mWallet. 4 |
  5. 5. Proprietary and Confidential The IPO: The Open Relationship Less Appealing 1.As a processor Square’s profit margins are low, which will depress stock price. 2.The company’s data and software offerings are immature and still in development. 3.Square’s new e- commerce marketplace, Square Market, faces the daunting task of competing directly with eBay and Amazon. What To Love 1.An IPO would give Square the freedom to move away from its profitable roots as a processor into a bigger future as a software/data/payments hybrid. 2.Strong name recognition and deep industry backing indicates it could get a high stock price. 3.If Apple and Google are out of the game, this is probably the best option for Square 5 |
  6. 6. Proprietary and Confidential For More Information Please see our exclusive PYMNTS.com coverage for more on Square’s way forward … •For More On square’s complicated relationship with google •For More ON Square’s developing for apple •For more on the early days of square and Starbucks. Please sign up for our daily newsletter SIGN UP 6 |
  7. 7. Proprietary and Confidential For More Information Please see our exclusive PYMNTS.com coverage for more on Square’s way forward … •For More On square’s complicated relationship with google •For More ON Square’s developing for apple •For more on the early days of square and Starbucks. Please sign up for our daily newsletter SIGN UP 6 |

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