Richard Branson buys stake in tech payments firm Square

Billionaire Richard Branson has stepped outside the realms of his Virgin Group to invest in Square, the mobile payments start-up run by Twitter co-founder and former chief executive Jack Dorsey.

The investment also comes just weeks after Branson invested in the blogging platform Tumblr. Both moves come after Branson has largely stayed away from individual investments in start-ups, prompting discussion about his interest in technology and the businesses currently being founded in Silicon Valley.

Virgin announced the investment on its website, although did not disclose the full amount. It comes after Square raised $US100 million in a round led by investment banks.

“I’m very passionate about helping people start and grow successful businesses, and Square is an incredible technology that inspires and empowers everyone to be an entrepreneur,” Branson was quoted as saying in the statement.

The statement notes that Branson was attracted to Square – which is not even two-years-old – due to its use of free hardware and the ability for users to accept payments anywhere.

The Square venture works by connecting a small square-shaped credit card reader to an iPhone or iPad using the audio jack. Using a corresponding application, users are able to accept credit card payments.

Square is positioning the app at sole entrepreneurs and small businesses, marketing itself as an alternative to expensive electronic transaction systems. Already it has been processing over $US2 billion in payments every year, and according to its statement, is eyeing international expansion next year.

The move comes after Richard Branson was listed as an investor in Tumblr’s recent $US85 million round, fuelling speculation about Branson’s interest in Silicon Valley start-ups. Both investments are in large, fast-growing companies.

Branson has largely stayed within the constructs of his own Virgin Group, opting to start new ventures within the brand rather than acquiring start-ups and building them up. Although Virgin has purchased companies before, they are usually acquired wholly and branded under the Virgin label – these latest investments pin Branson as a possible prominent angel investor in the tech community.

However, it comes after Branson has been spending more time in America focusing on his airline, Virgin America, which is based out of the west coast.