The financial press are saying Square has plans to go public. In writing about the reports, the Wall Street Journal cited “a person familiar with the matter” who said Square has already filed its prospectus confidentially.
The move calls to mind PayPal. Back in 2002, eBay realized that its users preferred PayPal above all other electronic payment methods. In July of that year, it acquired the company, only months after PayPal went public on Nasdaq.
So would it make sense for an ecommerce marketplace to consider acquiring Square?
The payment service became popular with Etsy sellers because of its Square Reader, a device that let sellers collect electronic and credit card payments in person (at craft shows and flea markets, for example) by attaching the device to their smartphone or tablet and swiping.
Unfortunately for Square, its device spawned lots of copycats, including PayPal, Amazon – and even Etsy itself in conjunction with mobile Point of Sale company ROAM, based in Boston.
That said, PayPal provided eBay with help in risk assessment and dispute resolution; a payment service could help Etsy as it grows. Keeping in mind that even though Square is not a PayPal clone, there could be some synergies.
The Wall Street Journal wrote of Square, “An IPO would also test whether public-market investors are willing to value the company as highly as its venture-capital backers, who have bid up Square’s valuation over the course of seven rounds of financing.” Which marketplace could afford such an acquisition?