Twitter creator Jack Dorsey today announced his new startup took its first funding round, lead by VC firm Khosla Ventures.
The business — called Square and to be located at SquareUp.com — will provide merchants an attachment for their Web-connected phones that they can use to accept credit card payments.
Coming soon: Hot dog vendors who accept credit card payments.
The dongle will come out for the iPhone first and other devices later. It will be cheap or free, as Square’s product will be more the service and the network than the hardware.
Jack’s goal is to disrupt the businesses behind those portable credit card swiping machines you see at the Apple Store and some restauraunts. With steep monthly fees, those machines are very expensive. Square will be cheaper for merchants. Jack is also said to be working on a friction-free merchant sign-up process.
Terms of the deal were not disclosed. Ron Conway will be an angel investor, among others. The investment is former Facebook CFO Gideon Yu’s first as general partner at Khosla.
In early November, a source in the investing community told us Square’s angel round was the “hottest i’ve seen.” He told us, “lots of people are mad they didn’t get an allocation.”
A new source confirms that “all the major VCs were in” on the bidding for Square.
When we first heard about Square, we thought for sure that long-time Twitter backer Fred Wilson of Union Square Ventures would invest. That didn’t happen, we understand, because Jack was looking for VCs with operating experience.
Here’s a TechCrunch video of Square in action: