Square acquired the startup Framed not for its technology, but rather for its data science team. These new Square employees will work on building financial models and algorithms that will help Square's lending business Square Capital. These data scientist will determine which of merchants are the best borrowers. Square Capital has been one of the fastest growing units at Square.
Square Capital has been one of the fastest growing businesses within the company, as Square revealed during its earnings call last week. The company SQ 0.25% said that it made $400 million in cash advances for all of 2015, of which $150 million came in the fourth quarter alone. Square Capital has made 70,000 advances in total. The Framed team will work on building financial models and algorithms that will help Square further determine which of its merchants it should loan money to. Sources familiar with the matter said that Square did not acquire Framed’s technology and its existing software will be shut down.