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Starbucks invests in Square

In a sign of the growing interest in mobile payments, start-up Square Inc. said Starbucks Corp. will use its technology to process some customer payments in 7,000 of its US stores, and that the coffee chain will invest USD25 million in the company.

The new funding – part of a bigger financing round that Square declined to detail – values the San Francisco company at USD3.25 billion, according to people briefed on the matter. That is double the valuation of around USD1.6b that Square snagged about a year ago from its private investors.

The new investment puts Square among some of the highest-valued closely held technology companies. Square currently is unprofitable as it continues to expand its operations, according to a person with direct knowledge of the matter. Co-founder Jack Dorsey declined to comment on the company’s financials.