Thursday 7th November, 2013

As shares in Twitter went public yesterday, news surfaced of another potential IPO on the horizon for Twitter co-founder Jack Dorsey. Square, the payments company he founded in 2009 has begun informal discussions with investment bankers, reported to include Goldman Sachs and Morgan Stanley for an IPO which may come in the new year.

Square has so far raised a total of $340m in venture capital funding, and Mr Dorsey has not yet made his intentions clear about the timing of a future floatation. He founded Square after being ousted as Twitter’s chief executive (though he later returned as Head of Product and remains Chairman). Square is growing at similar rates as Twitter, with sales approaching £1bn

The company is a strategic partner of Starbucks, who are also one of their investors. Chief Executive Daivd Viniar is the former finance officer at Goldman Sachs - lead adviser on Twitter's IPO.

Square's revenue stream come from taking a cut of every payment made across its range of products - which include mobile apps. Most of the organisations using Square's technology are small businesses with high volume, low value transactions - such as coffee shops and smaller retailers. As such the company faces competition from PayPal, and other start-ups such as iZettle.