With all the hullabaloo about Twitter’s resurgence following the announcement of 6 million new users and its second straight profitable quarter, it’s easy to forget that cofounder and CEO Jack Dorsey is in charge of not one, but two publicly listed companies.
Square, the mobile payments and financial services company Dorsey created with Jim McKelvey back in 2009, has actually been outperforming Twitter on many fronts and has been posting consistently solid earnings of late. This trend culminated in Square’s shares hitting an all-time high of nearly $55 last month, a staggering 500 percent up on its $9 IPO price a few years back. Conversely, Twitter has spent much of the past couple of years below its $26 IPO price and only recently edged back over that mark to currently sit at around $30.
So while Twitter is doing better of late — despite facing constant scrutiny as one of the preeminent social platforms used for spreading all manner of (mis)information — it’s still not exactly knocking the ball out the park. Square, on the other hand, is quietly going from strength to strength.
Against that backdrop, Square has been ramping up acquisitions as it looks to build on its recent growth. Just yesterday, Square snapped up fellow San Francisco-based company Weebly in a deal worth $365 million. As a popular website builder and web-hosting service, Weebly could serve as a key conduit for Square to not only access Weebly’s existing subscription revenue but also cross-sell Square’s own products — which include card readers, software, and payments services — to small businesses.
“Omnichannel commerce is our top focus area in 2018,” noted Square seller lead Alyssa Henry. “From managing orders, appointments, and payments to building a website, running a business is complex, and entrepreneurs around the world want powerful and intuitive tools. “With Square and Weebly, sellers will have one cohesive solution to build their business.”
This deal comes a week after Square’s acquisition of Zesty, or at least “certain assets” of Zesty, for an undisclosed amount. Zesty will be used to boost Square’s Caviar corporate food ordering platform with new menu-planning and order-management smarts. Three months ago, Square also acquired Fort Worth-based Entrees On-Trays, adding dozens of new restaurant clients to the Caviar platform.
Less than a quarter of the way into 2018, Square has already acquired more companies than it has in any year since its inception. Indeed, Square bought just one company last year — acquiring OrderAhead to, once again, boost its Caviar business. Before that, Square had acquired two companies each year from 2013 to 2016, and only one each year from 2011 to 2012.
Weebly represents Square’s 14th known acquisition, but the rate at which Square is buying companies is seemingly accelerating. The manner in which Square is diversifying its product offerings via these acquisitions is notable too, as it not only gives the company’s existing customers value-added services to increase retention, it could also grow the amount of revenue Square can generate per client.
But crucially, as Square looks to enter new markets where multiple competitors may have first- or second-mover advantage, it will need all the carrots and sticks it can find. A large chunk of Weebly’s 625,000 paid subscribers are outside the U.S., which gives Square a good opportunity to grow in international markets where it already operates — Canada, Japan, Australia, and the U.K. — as well as helping it find leverage in new markets.
“Nearly 40 percent of Weebly’s paid subscribers are outside the U.S., which will help accelerate Square’s global expansion,” Square said yesterday.
At Square’s U.K. launch last year, Dorsey hinted that the company was already looking to expand, but he didn’t give any indication of where that might happen. “We’re looking at our next markets, but we need to ensure our next markets are thriving,” Dorsey said. “When we get that confidence, we’ll continue to build out.”