Square picks Jacqueline Reses ahead of IPO
SanFrancisco-based financial services company Square,has announced the appointment of Jacqueline Reses, outgoing chief development officer of Yahoo, as its head of its business financing division Square Capital. Square is in the process of going for an initial public offer (IPO). Square wants to send a message to the capital market that how strong is its top managerial board. The hiring of Reses will enable Square Capital to tap potential areas of business growth where traditional business firms ignore.
Reses will directly report to Jack Dorsey, CEO of Square. She was handling acquisition decisions of Yahoo and recently Reses led the spinoff of Yahoo's $27-bn stake in China-based Alibaba Group. By appointing Reses, Square has conveyed a strong message to potential investors about how serious the management in building talented top brass.
Square has already filed for IPO and last week announced its plans to mobilize funds. The founder of Square Jack Dorsey is also Chief Executive of Twitter. Dorsey said: "Jackie's understanding of the financial services industry and her background in tech and investing make her the perfect fit to lead Square Capital."
Square is launching its IPO soon. Though the financial company is generating significant revenues, it couldn't make profits. Square registered $560million revenues during the first half of 2015 and a loss of $77.6mn.
Owing to a long-term payment deal with Starbucks, Square is losing revenues, according to its IPO filing. As part of its financing business, it has advanced over $225mn to Square sellers from 2004 onwards. Square Capital hopes that this will add up to the profitability.
Reses in a statement that "Square Capital reaches businesses that traditional financial institutions often neglect, and I'm very excited to expand that opportunity to others." Reses was on Alibaba's board for two years before its IPO in 2014. She also worked at Apax Partners and Goldman Sachs before joining Yahoo.
The appointment of Jacqueline Reses will serve Square in two ways. The major factor is that Jack Dorsey has been named as CEO of Twitter just early this month. Dorsey's doubling up CEO role at Square and Twitter is considered to be a potential risk factor ahead of IPO. Another advantage is that Reses' experience and ability will help Square not only ahead of IPO, but also leading the company with mobilized funds.
Reses' exit from Yahoo is another major loss for Yahoo CEO Marissa Mayer, whose three-year tenure over the internet company has been fraught with internal strife and management changes. Yahoo lost Chief Marketing Officer Kathy Savitt to movie studio STX Entertainment in September. In addition to this, other significant departures included the early 2014 firing of well-compensated Chief Operating Officer Henrique de Castro.