Marc Rubinstein on the Evolution and Business Model of Square, Inc.

We had the pleasure of speaking with Marc Rubinstein, author of Net Interest, a financial sector newsletter, about his essay, Hip to Be Square.

Marc writes,

“The term unicorn is used to describe a privately held startup company valued at over $1 billion. In the summer of 2014, there were around fifty of them in North America and Europe. Many of the big ones have now gone public, the most recent being AirBnB which debuted on the stock market last week. Among them sit two financial technology companies—Square and Lending Club. Together they bookend the returns these unicorns have shown in public markets. While Lending Club has bombed, down 80% since its summer 2014 valuation, Square has ballooned. This week its valuation surpassed $100 billion, thirty times its valuation back then.”

“In addition, because Square came to the market earlier than many of the others, most of that value has accrued to public market investors rather than its venture capital backers. And being public, its successes and failures have been a lot more visible.”

“My own relationship with Square is mixed. My fund participated in its IPO in late 2015 but we sold our position a few months later. In 2017, I went to visit the company at its headquarters in San Francisco, but I came away sceptical. This year alone the stock is up 260%, a beneficiary of the changes in the technological and financial landscape that Covid has accelerated.”

“So what makes Square so hip?”

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About This Audio Series:

MOI Global looks forward to illuminating conversations on the financial sector with Marc Rubinstein, whose Net Interest newsletter we have found truly exceptional. Our goal is to bring you Marc’s insights into financial services businesses and trends on a regular basis, with Marc’s weekly essays serving as inspiration for our discussions.

About Marc Rubinstein:

Marc is a fellow MOI Global member, managing partner of Fordington Advisors, and author of Net Interest. He is a former analyst and hedge fund manager, most recently at Lansdowne Partners, with more than 25 years of experience in the financial sector. Marc is based in London.

About Net Interest:

Net Interest, authored by Marc Rubinstein, is a newsletter of insight and analysis from the world of finance. Enjoyed by the most senior executives and smartest investors in the industry, it casts light on this important sector in an easy-to-read style. Each post explores a theme trending in the sector. Between fintech, economics and investment cycles—there’s always something to talk about!

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