Square COO Keith Rabois Departs Company(allthingsd.com)
allthingsd.com
Square COO Keith Rabois Departs Company
http://allthingsd.com/20130124/square-coo-keith-rabois-departs-company/?mod=tweet
17 comments
I am not surprised anymore. I was when I first saw their card reader at the tiny smoothie shop next door. And then again when the old guy with the hot dog cart also got one. But now if I hear Square is making $100b/yr I'll just think of those tiny business and say: Obviously.
If my math is correct: 2.75% of $10B/yr = $275M/yr. Although they may not be charging 2.75% across whole $10B. I don't think Starbucks would pay 2.75%.
Don't forget that the credit card companies get most of that.
They have to give most of that to the credit card companies. I am not sure how much of the 2.75% they get to keep but I would guess less then half, maybe even only a quarter?
It actually is more like $200mm gross (due to discounts, and that's run-rate, not 2012 I think), and then goes to Chase Paymenttech and to the card associations, interchange, issuers via chase -- as well as all their other costs. So I think netting $50mm off the transactions is generous.
They have at least 500 employees -- figure $100k/ea loaded cost, only possible since I think a lot of those employees are not engineers. That's all of it right there.
They really need to be in the 50b/yr range to be doing well. OTOH, they will probably get there in a year or two, and I don't see their costs going up much.
They have at least 500 employees -- figure $100k/ea loaded cost, only possible since I think a lot of those employees are not engineers. That's all of it right there.
They really need to be in the 50b/yr range to be doing well. OTOH, they will probably get there in a year or two, and I don't see their costs going up much.
I remember reading somewhere the average swipe fee is 1.6% for cards. Don't know how accurate that is but I'm assuming it's not far off.
You're pretty close to the mark - at least for a company doing that much payment volume. Maybe closer to 1.8% or so. There's dozens of variables (debit vs credit, issuing bank, network, international, chargeback rates, etc...) so it's hard to say with any reasonable degree of certainty.
Paypal's Merchant Services net Total Payment Volume was $28 billion in Q4 2012, up 28 percent year over year. PayPal revenues for Q4 2012 were $1.54 billion, growing 24 percent year over year.
Pretty shocking. Although Square is well on its way, I think there is still a lot of good COO work to do. But I am definitely looking forward to what's up next for Keith (who clearly had a tremendous run at Square).
didn't Sequoia just lose a partner?
Greg McAdoo - whats the connection?
Rabois seems moderately connected to Sequoia- they've shared in a ton of deals, given he's a prolific / selective angel & he and Sequoia partner Roelof Boetha both worked at PayPal.
Don't think there's a formal connection between him and McAdoo.
Don't think there's a formal connection between him and McAdoo.
That's getting to the point where they make real money (maybe $50mm/yr?) and have a serious shot at profitability.