Square's Keith Rabois talks about the mobile payments start-up's new funding
Square, the mobile payment start-up from Twitter co-founder Jack Dorsey, announced today that it has raised a new round of funding that values the company at about $240 million. I spoke with Square’s chief operating officer, Keith Rabois, about it.
Interesting side note: Sequoia Capital's Roelof Botha is joining Square's board. Rabois and Botha worked together at PayPal. Botha, who as the former chief financial officer at PayPal has some serious cred in payment systems, also got Sequoia to invest in "a little company called YouTube" -- at Rabois' suggestion.
How did the round of funding come about?
We took a very streamlined approach, no formal presentations. We didn't pitch anybody. In December, we basically only spoke with a limited set of people with whom we had longstanding ties. We said, "We'll sit down and talk to you about our business and how well it is doing and how we think about the world." It was just a conversation about Jack's vision for the company and Square and how well we are executing on that.
Why raise money now, and what will you use the money for?
No. 1, for recruiting. We currently have 52 full-time employees. We are targeting doubling or tripling that number in 2011. No. 2 is awareness. Not everyone is aware of Square yet. We are trying to change that.
How do you increase awareness of Square?
Historically the way people have found out about Square is that they pay a merchant at the farmers market with it and decide they want to get it themselves or they read about it on Twitter or in media coverage. But we have not engaged in traditional marketing campaigns. We are going to invest in marketing. You will see that go live in January. It's a big task to ensure that the 180 million people who carry plastic in their wallets know about Square.
How has adoption of Square grown since October, when you launched to the public?
We have been signing up 30,000 to 50,000 new accounts per month and the pace is accelerating.
Square has quite a number of competitors, and more emerging all the time. How do you handle that competition?
The good news is that Square is in a space that everyone thinks is interesting right now. There are a lot of things we do uniquely, like the quality of our design. We think about melding hardware and software in a beautiful experience for the payer and the business. We also are allowing people to accept credit cards for the first time without requiring a credit check. We use social data and other things to gauge applicants, and we approve 95% in less than a minute.
Will the management team expand?
We are looking ultimately for a director of engineering, but we are fundamentally very comfortable with how the business is operating right now.
Will Jack Dorsey remain CEO?
Absolutely, no doubt about that.
Why is he the right leader for Square?
He has two key ingredients: He has the macro vision and the pixel-perfect product vision. Almost nobody can do both.
-- Jessica Guynn