How Cash App Grows: Becoming King For Block's $24B ...

In answering it, I realized I haven’t written about any consumer finance apps. I said Venmo, PayPal, Chime, and Revolut where good examples.

And they are, but I did some more digging after and realized I’d left out a blaring omission…Cash App.

If you live outside of the US, you likely haven’t heard of them. Simply, they’re a mobile payment service, and their bread and butter is peer-to-peer payment transfers.

Yes, same idea as PayPal, Venmo, Zelle, etc.

But Cash App has extended far beyond that since their incubation within Jack Dorsey’s Block (formerly Square), and despite being late-ish to the payments party, they have done a tremendous job at breaking away in the market of digital wallets and payment apps by becoming a diversified platform and payments Super App platform. One that’s cheaper and more accessible that traditional banks, and one that allowed Cash App to wedge themselves into the market by targeting “the unbankables”.

Given Cash App was built as a startup within a startup, an exact valuation is hard to pinpoint. But for perspective, Block—the horizontal payments company offering a full suite of commerce products, including POS hardware and software—currently has a market cap is $24B.

And today, 63% of Block's revenue comes from Cash App. In the second quarter of 2023, Block's revenue grew 26% year over year to $5.5 billion. Cash App's revenue increased 36% to $3.6 billion during that same period.

A project with an outsized ROI for the growth behind the payment category queen. And even more important when you consider the consumer market opportunity Cash App unlocks for Block. As per Ark Research:

In 2024, we expect more than 220 million digital wallet users in the US which, if valued like bank customers at maturity today, could represent an $800 billion opportunity in the US equity market.

Just for clarity—digital wallets are smartphone-enabled financial ecosystems that give folks access to a variety of services, like wealth management, insurance, instant payments, investing, banking, and crypto assets