Mobile-payments company Square on Wednesday revealed its plans to go public, putting in motion what should be one of the biggest and most-anticipated tech initial public offerings of the year.
The 6-year-old maker of credit-card reading devices was expected to make such a move for months. Reports came outthat the San Francisco-based company filed confidential paperwork with the Securities and Exchange Commission as part of its IPO plans. The new SEC filing Wednesday provided a major step toward an IPO and the first public financial picture of the startup.
Square's IPO push comes just after its founder and CEO, Jack Dorsey, wasearlier this month. The decision by Dorsey, a Twitter co-founder, to lead two companies at the same time appeared to complicate Square's IPO plans. The company wrote in its SEC filing that Dorsey's role at Twitter "may at times adversely affect his ability to devote time, attention, and effort to Square."
Square plans to list on the New York Stock Exchange under the ticker symbol "SQ."
Square is perhaps best known for the little white-plastic card-reader that plugs into a smartphone or tablet and enables small businesses to accept credit card payments. Square makes money by taking a cut of each transaction. The company also makes the Square Stand, which converts an iPad into a point-of-sale system.
The company has moved beyond the realm of the high-tech cash register to start offering a suite of services for small and medium-sized businesses. For example, its Square Capital program hands business owners a one-time cash advance in exchange for a cut of sales in the future. The company also runs a peer-to-peer payments service called Square Cash, which competes against PayPal and PayPal's Venmo, as well as Google Wallet.
The SEC filing comes more than a year after The Wall Street Journal reported that Square was considering a sale, due to mounting losses and a shrinking cash pile. A Square spokesman at the time denied that the company ever seriously considered selling itself.
With the private company's financial picture now publicly available, the Journal's report proved correct that Square has faced substantial losses. Last year, the startup was $154 million in the red, compared with a $104.5 million loss the year earlier. However, revenue jumped 54 percent last year to $850.2 million, with transaction revenue making up most of the total. The company's cash stockpile was nearly $200 million as of the end of June.
Square plans to add to that cash with the IPO, looking to raise roughly $275 million, according to Wednesday's filing.
The gross volume of payments Square processes reached $23.8 billion last year, up 61 percent from a year earlier. Rival PayPal, which recently spun off its parent eBay, reported $227.9 billion in total payment volume last year, up 27 percent.
The IPO is expected some time this year, though no date has been set. The number of shares to be offered and the price range haven't been determined.
Dorsey, whose salary last year as CEO was $3,750, owns nearly a fourth of Square, while venture-capital firm Khosla Ventures owns 17.3 percent.