Square: A Trillion Dollar Company in the Making

There are a handful of companies out there that I pay close attention to. Among these companies is Square.

Square (SQ) focuses on financial services - including merchant payment solutions (i.e. point of sales hardware/software for small businesses), digital wallets (cash app), and other payment/business solutions that especially target online businesses.

My first experience with Square was several years ago when I was working at local pizza shop. The PoS (point of sales - not to be confused with proof of stake) software and hardware was by this company called Square and I enjoyed the experience. They've always had a footprint of being both innovative and easy to use.

Moving on from there, I also had some experience with the Squarespace web development side of Square's business. They've partnered with many of the largest names in online influencers to create and advertise the creation of websites for small businesses/entrepreneurs.

More recently (in the past year), I started using the Cash App and the Cash Debit Card for various payments. Utilizing it like a bank account/debit card that I can use to spend on groceries, restaurants, online payments, peer-to-peer transfers, etc.

The Cash App's use cases continue to grow. When I first started using the app, there was a simple debit card and banking system built-in. Today, you can trade fractional shares of stocks, receive ACH transfers, do peer-to-peer payments, and most importantly (for me) you can buy, sell, deposit & withdraw Bitcoin.

When Bitcoin was introduced to the Cash App, my personal usage exploded. The value proposition for me is that I can easily deposit Bitcoin from the crypto world back into the "real world" on the Cash App and then spend it at local restaurants, grocery stores, for bills, etc. in a simple and efficient way.

Before the Cash App, I was selling BTC into Coinbase, then converting it to USD, then withdrawing it to my bank account. Today with the Cash App, the process is far easier and the fees are lower as well.

Cash App is a Sleeping Giant

I tend to call undervalued investments sleeping giants. I wrote a post recently about how the BAT/Brave token/browser are undervalued and many of the same characteristics also apply to SQ and their Cash App product.

Ark Investments is a research company and fund that I follow closely. Their research on innovative industries is extremely valuable and I think the are one of the few firms out there that live on the bleeding edge of investing in innovation. They are a big investor in SQ and have talked at length about the potential of digital wallets like the Cash App:

Source: ARK

It's no secret that digital payments and digital wallets are the future. Quantifying the potential of digital wallet solutions is incredibly important when it comes to looking at a company like Square or even PayPal (with their digital wallet-Venmo).

I use both Cash App and Venmo and can honestly say that Cash App is vastly superior to Venmo in nearly all ways imaginable. These 2 apps are leading the digital wallet revolution by leaps and bounds, so I expect both of them will perform well for their parent companies in the coming years.

Cash App Growing in One of the Worst Economic Periods in History:

There's no doubt that this is a time that will go down in history as one of the greatest economic and societal failures of a generation. While many companies will not survive this time, others are actually thriving based on an accelerated move to online shopping, payments and interactions. The Cash App product is outperforming every expectation imaginable:

Source: Square

Cash App's MAUs (monthly active users) have been growing exponentially - as can be expected from a network effect-based application. We're still in the early stages of Cash App adoption, but Square continues to roll out bigger and better features.

Usage of the Cash App is growing and the revenue growth is there to back it up:

$1.20 billion in revenue (361% Year-Over-Year growth)
$281 million gross profit (167% YoY growth)

Square is one of the top companies on my list of tech innovators to invest in for the next decade. The potential for future growth is off the charts.

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