The Atlanta-based company’s mobile app tries to be a resource to consumers who are looking for local merchants and events, sort of like the Web’s original CitySearch service from years ago — except that it’s on mobile. The app also distributes coupons to restaurants, but instead of charging consumers for the deals, like Groupon does, they are free, and merchants pay a flat rate to Scoutmob each time one is redeemed.

Investors in the company’s second round include AOL Ventures, New Atlantic Ventures, Capital Broadcasting, Cox Enterprises and Thrillist CEO Ben Lerer. To date, Scoutmob has raised $5 million, which means that even if it wanted to, it doesn’t have the resources to go up against Groupon and LivingSocial.

In an interview, Scoutmob co-founder Michael Tavani said the company gets lumped into the daily deals category, but said that from day one, “we tried to differentiate ourselves and to be more of a mobile company.”

So far, the strategy has worked.

The app, which is available free on iOS, BlackBerry and Android, has 1.2 million users who have redeemed one million offers. To date, the company has launched in 10 cities, with varying success rates. Some markets, like Seattle, don’t have many deals yet, while other cities, like Atlanta or Washington, D.C., are used more.

Because of its emphasis on mobile, the company was also able to to score a partnership with payment processing company First Data Corporation.

“It’s crazy, we are a two-and-a-half year-old company, and every week we have the largest payment companies in the world contacting us,” Tavani said. ”They are worried that if they don’t have mobile engagement, then what do they have?”

First Data processes about 55 percent of all transactions in the U.S., and will help Scoutmob close the loop of offering a discount, making a purchase and earning loyalty points.

The new funding will be used to support the company’s next wave of product development, which will include building out a mobile rewards program with the help of First Data and other payment companies it signs up.

Tavani said it will work like this: When users make a purchase at a Scoutmob location using a credit card, they’ll accrue points automatically. Once enough points have been accumulated, they can be redeemed at any Scoutmob retail location.

Unlike traditional loyalty programs, which require consumers to go to the same coffee shop 10 times in order to earn a free coffee, Scoutmob will let consumers earn and redeem points by visiting any merchant in its network. It’s similar to frequent flyer programs, where miles can be earned at a variety of merchants and then redeemed at a handful of airlines.

“We want to be the equivalent of an airline reward program, but for local,” Tavani said. “That’s exactly what we want to be.”

Scoutmob has landed in a sector spanning local businesses and mobile payments, which is ripe from innovation and extremely crowded by well-funded start-ups and massively large incumbents. But Tavani argues that it’s a level playing field.

“There’s going to be multiple players and lots of winners,” he said. “Groupon and LivingSocial are two with a gigantic lead. But we can go out and visit merchants today — there’s no one preventing us from having those conversations.”

It’s a meritocracy. I have no doubt that there are pockets of issues. I can only speak about Sequoia, we have quite a few women partners.

– Sequoia Capital partner Greg McAdoo, answering a panel questions at TechCrunch Disrupt about whether there’s sexism in the venture capital industry

There’s no question that every venture capitalist within 100 miles of Silicon Valley wanted to squeeze their khaki-clad selves into what had become tech’s hottest deal of late.

That would be to get a piece of the new round of funding for start-up phenom Pinterest.

But while piles of VCs and other investors tried to work every angle possible to noodge into the action, the iconoclastic CEO and co-founder Ben Silbermann decided to go big and go global by hooking up with a Tokyo-based Internet giant.

Japan’s Rakuten will invest upwards of $50 million in a $100 million round that values the social bookmarking site at $1.5 billion.

Rakuten is one of the largest online commerce companies in the world, with a flagship site Rakuten Ichiba, among others. It was founded in 1997 and had revenue of $4.7 billion in 2011.

Most important in Pinterest’s calculation was apparently the link with its CEO Hiroshi Mikitani, whose nickname is Mickey. One the richest men in Japan, Mikitani is one of the best known entrepreneurs there where he’s been described as “Richard Branson meets Jeff Bezos.”

I briefly chatted with Mikitani last night about why he decided on the Pinterest deal, in a conversation where he focused a bit on Rakuten’s famed “omotenashi” or “empowerment” philosophy. Simply put, the concept is that — unlike an Amazon — Rakuten is a facilitator of commerce, much like its shopping mall metaphor beginnings. The approach is to aid merchants rather than compete with them.

It’s a little eBay, a little Alibaba, some Etsy and even a little Amazon Web Services mixed in. It’s also a place that can move retail globally, which is presumably the attraction to it by Pinterest.

ATD: Why did Pinterest pick you?

Mikitani: We are not a venture capitalist. We got together and talked about our story and our history.

We agreed that we shared a vision of the future of Internet e-commerce.

ATD: Why make an investment?

Mikitani: When we started to talk about being involved in the round of investment, we wanted to invest as much as possible.

We were very impressed by their business model and also the management style.

ATD: What made Pinterest so attractive in comparsion to other similar companies?

Everyone is talking about social commerce and best solution to social commerce, but Pinterest really was the first to use graphics that well to connect with people.

Rarely have we seen such a powerful media and we were seeing huge traffic coming from Pinterest [to Rakuten sites]. It was much higher than anyone else.

ATD: What do you bring to the table?

Mikitani: I think there are some things we think we can do with our expertise. Ben and his team have an extremely strong commitment to make their products as attractive as possible.

But we have 40,000 stores in Japan and we can give them access to our customers and do aggregation to engage in everything. And we have sites in many other countries too.

ATD: How are you going to work together?

Mikitani: We are not going to stop them from doing dealings with other e-commerce companies. But we can have more constructive input on how to make their site more effective from e-commerce point of view.

This is a long-term arrangement and we have a strong committment and attachment to this business. We truly understand their business and respect their management.

The funding is expected to be announced tomorrow morning.

(Update: Rakuten confirmed the deal in a press release, which is below.)

The Tokyo-based Internet giant will invest upwards of $50 million in a $100 million round that values the social bookmarking phenom at $1.5 billion.

There might be other individual investors in the new round, but those were still to be determined tonight by Pinterest co-founder and CEO Ben Silbermann.

(Correction: We previously reported it was a $120 million round, but sources said it is $100 million. It’s possible more could still be added, as we heard conflicting accounts.)

While the latest round of funding for Pinterest has been the most hotly sought of late in tech circles, one source said Silbermann was looking for a global strategic investor and had talked to several large Asian companies.

Said one source on why he settled on Rakuten: “He just really liked them.”

The current investors in Pinterest, which is a social collection site where users can “pin” their interests via a handsome graphical interface, include Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital, as well as several well-known angel investors. That group had valued the company at $200 million last October, and are joining the new round pro rata.

Founded in 2008, Pinterest had previously raised a little under $40 million in funding.

It’s interesting that the latest round was not led by an institutional investor, since everyone and their mother wanted in on the deal. Sources said no new venture capital firms were included in the round and that is the way Pinterest’s quirky leadership wanted it.

Sources said Silbermann has been concerned with Pinterest’s global growth as well as fending off international clones, and was looking for a partner with which the start-up could work closely.

“Ben did not want any more VCs,” said one source. “He wanted an investor that moved the company forward.”

Rakuten will presumably help advise Pinterest on turning their pretty pictures into purchases, as commerce is already starting to emerge naturally on the site.

It’s a good choice of partners in that regard. Rakuten is one of the largest e-commerce companies in the world, with a flagship site Rakuten Ichiba. It was founded in 1997 and had revenues of $4.7 billion in 2011. Its CEO is Hiroshi Mikitani, whose nickname is Mickey.

One the richest men in Japan, Mikitani is one of the best known entrepreneurs there; he has been described as “Richard Branson meets Jeff Bezos.”

Earlier today, The Next Web reported that the funding was coming this week and said the company was looking at international partners, but it did not name Rakuten.

Rakuten Leads Investment In Pinterest

Global social commerce pioneer takes stake in online sharing service

TOKYO, May 17, 2012 – Rakuten, one of the world’s largest online marketplaces, today announced that it is leading a $100M investment in Pinterest, with participation from existing investors Andreessen Horowitz, Bessemer Venture Partners, and FirstMark Capital, as well as a number of angel investors.

The funding will allow Pinterest to continue improving its service and expanding its community globally. The investment also marks the start of a strategic partnership between Rakuten and Pinterest to help expand in Japan and into Rakuten’s 17 other global markets.

Hiroshi Mikitani, CEO of Rakuten said: “While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining. We see tremendous synergies between Pinterest’s vision and Rakuten’s model for e-commerce. Rakuten looks forward to introducing Pinterest to the Japanese market as well as other markets around the world.”

Ben Silbermann, co-founder and CEO of Pinterest, said: “Our goal is to help people discover things they love, by connecting people through their shared interests. Bringing Rakuten on board gives us an amazing opportunity to move a step closer to this goal.”

Rakuten ranks among the top 10 internet companies in the world. Among its numerous online properties, its flagship B2B2C (business-to-business-to-consumer) model e-commerce site Rakuten Ichiba is the largest e-commerce site in Japan and among the world’s largest by sales. Its global presence has been reinforced through the acquisitions of leading online marketplaces Buy.com (US), Priceminister (France), Ikeda (now Rakuten Brasil), Tradoria (now Rakuten Deutschland) and Play.com (UK), and investments in Ozon.ru and AHA Life. Whereas other marketplaces may compete directly with sellers, Rakuten’s model seeks to empower merchants to deliver Omotenashi, a Japanese high service mindset, which helps sellers create lasting relationships with customers.

And here’s a video of Kara pontificating away on the subject for WSJ.com’s “Digits” show:

Since launching in August, Belly has signed up 1,400 merchants in eight markets, and is adding an average of 100 more merchants each week. Additionally, it has more than 200,000 active users, who have checked into business more than 800,000 times.

The business draws a little bit from Foursquare, because it requires users to check in to earn points; and also draws a little bit from Groupon, because of its focus on local commerce.

But Jeff Jordan, a partner at Andreessen Horowitz, argued that Belly is not at all like Groupon. “It’s the anti-Groupon,” he said. “Groupon is doing lead generation through discounting. … What Belly is trying to do is loyalty.”

The difference, Jordan said, is that Belly doesn’t require merchants to offer discounts to get consumers to come back.

For example, a Chicago comic book store owner is letting shoppers punch him in the stomach; a Washington, D.C., Ben & Jerry shop is giving away a chance to eat ice cream with Jerry after 200 visits; and a barber is handing over the clippers to frequent customers, who will shave off his own beard.

Jordan, the former chairman and CEO of OpenTable and former president of PayPal, said there are four reasons why he was attracted to the start-up:

1. The management team: Founder and CEO Logan LaHive previously worked at Redbox, and before that, Pay By Touch, the biometrics payments company that raised $350 million in capital before failing.
2. Product execution: Jordan said both merchants and customers like the product. Merchants must install an iPad at the register, where consumers can check in to earn points by scanning a bar code from their phone or a loyalty card.
3. DNA of the investors: Before Andreessen Horowitz got involved, LaHive incubated the company in the offices of Lightbank, the VC fund created by Groupon founders in Chicago. Jordan believes that the one who gets to market fastest will win in this market. Belly has that in its DNA.
4. Connected retailers: Once retailers have an iPad in every store, there will be additional opportunities for Belly to roll out other services.

LaHive said the capital will be used to fuel expansion into new markets and to develop new services. To date, the company has raised $13 million.

Belly charges merchants $50 to $100 a month for the service, which includes an iPad, a case and lock for the iPad, marketing materials, and data and analytics to manage their business better.

Belly @ Berry Austin from Bellycard.com on Vimeo.

Instead, the Burlingame, Calif., company was going to focus on building games for smartphones.

Now CrowdStar, known for titles such as Top Girl, Social Girl and Modern Girl, is announcing that it has raised $11.5 million in a second round of funding to fuel its mobile ambitions.

Investors in CrowdStar’s second round are Time Warner, Intel Capital, YouWeb, The9 and NV investments. To date, the company has raised $35 million in capital.

With the new funding, the company said it plans to pursue mobile games targeting the female audience and focusing on shopping and fashion. The games will be distributed using Facebook’s social graph, the Gree social gaming network and Apple’s Game Center.

“This funding round validates our pivot to mobile social games,” Relan said in a release. “We’re going for a bigger market with lower production and acquisition costs compared to social games on the web.”

This summer, CrowdStar will launch a brand-new Girl franchise game on Gree’s emerging mobile social network. Just yesterday, Gree announced it had acquired mobile social game maker Funzio for $210 million, showing its committment to signing up new games to the network. CrowdStar is also distributing games on Amazon’s Kindle Fire.

Late today, it announced the acquisition of Funzio for $210 million.

At that price, it exceeds what Zynga just paid for OMGPOP, which arguably had just one hit game. Sources said at the time that Gree was also one of the bidders in that deal.

Funzio, which is based in San Francisco, has developed a number of well-received mobile social games, including Crime City, Modern War and Kingdom Age, all of which have generated more than 20 million downloads.

“The team at Funzio is creating some of the best mobile games in the world today. This acquisition allows us to join their talent and expertise with our vision for a mobile social gaming ecosystem,” said Naoki Aoyagi, Chief Executive Officer of Gree International, in a release. “We are extremely excited to expand our mid-core portfolio and continue to show how the mobile games market is the inevitable next step for gamers worldwide.”

Funzio’s executive team, including CEO Ken Chiu and COO Anil Dharni, will join Gree International as Senior Vice Presidents while CTO Ram Gudavalli and VP of Engineering Andy Keidel will join as Vice Presidents. In February, Gree announced aggressive hiring plans in San Francisco. The company said it was moving into a new 41,000-square-foot office this spring, which will enable it to double its headcount to about 300 employees.

In May 2011, Funzio raised $20 million, and more recently, TechCrunch reported it was seeking to raise $50 million at a $350 million valuation.

Gree is aggressively trying to build a social games network for mobile phones, similar to the network Facebook has built for social games on the Internet. Rivals include DeNA’s mobage network, which came to market through the acquisition of San Francisco-based Ngmoco, and Apple users would compare the network to the iPhone and iPad’s Game Center.

But in order to attract users, it must first have good games. For foreign companies, like DeNA and Gree, it’s even more important for those games to appeal to Western markets as they try to expand here.

Perhaps one reason VCs don’t want to invest in Pebble is because they fear Apple.

– John Battelle, on the Pebble “smart” watch

Oh, you surely already saw the Winklevii — the famous twin godlets who did not invent Facebook — on CNBC yesterday, but we had to also shove it up to maintain our 100 percent we’ll-post-whatever-those-goofs-do record.

Next chapter: They are VCs. Everybody laugh. Now, please move along.

Here’s the video, and also our much more favorite one about the social networking loser pair, from “The Simpsons” (thanks for the reminder, BostonInno):

The e-commerce site uses 3-D to allow shoppers to virtually try on glasses before they decide to buy them.

To do so, visitors must record a short video of themselves to create a 3-D image, which they call a Ditto.

The image is a little spooky as your head swivels right and left to see how the glasses look on your face and wrap behind both ears. But it does do a good job of deciphering whether a pair of Vera Wangs or Ray-Bans would look better on your face.

The company plans to use the capital to develop its technology and add to its team.

Ditto Secures $3M Round for Designer Eyewear eCommerce Site

Site lunches with 3D virtual fitting technology to transform the way we shop, try-on, and buy opticals and sunglasses

Mountain View, CA – April 26, 2012 — DITTO, an eCommerce site for designer eyewear that uses patent-pending 3D virtual fitting technology, today announced that it has closed $3 million in financing led by August Capital. Angel investors, friends and family also participated in the round.

DITTO is a website that allows consumers to record a short video with their webcam to create a 3D virtual self, or “DITTO”. Users can virtually try-on eyewear in 180-degree views to see how a particular style looks and fits their face before they make a purchase. DITTO.com also integrates social media features, allowing the user to post side-by-side snapshots of their DITTO in different glasses to Facebook to poll friends for opinions.

The site offers an extensive selection of designer frames, with more styles and sizes than most retail and optical stores. The curated brand selection on the site includes Persol, Chloe, Ray-Ban, Tag Heuer, Vera Wang and others. Frames are sold at suggested retail prices ranging from $110 to $1,800 and high-quality anti-reflective coated prescription lenses are included at no cost on optical glasses. These exact lenses often cost more than $150 at retail locations. Customers receive their new glasses within 10 days with free shipping, free 90-day returns and first-class customer service.

“Great eyewear changes your mood and your persona,” says Kate Endress, cofounder and CEO of DITTO. “Yet buying them at stores leaves you with limited selection and, to date, buying online hasn’t been a viable option because of one big question: Do they fit? We couldn’t be more excited to launch DITTO.com, which we believe will take online shopping for eyewear to the next level. Through partnerships with some of the world’s best brands, our proprietary technology and phenomenal customer service, we are going to make buying glasses as much fun as wearing them.” I love this last quote you say about ‘buying glasses as much fun’

“Ecommerce has dramatically evolved across multiple categories including fashion and accessories, yet eyewear remains extremely challenging to market and sell online. DITTO’s innovative technology eliminates the hassles and impediments associated with buying eyewear online as well as in-stores by giving consumers the ability to not just see how they look and fit, but also ask a trusted source to help select which frames to buy,” explained Howard Hartenbaum, general partner at August Capital and founding investor in Skype. “We are thrilled with the investment and believe DITTO has the right model, technology and team to build a great company.”

Hartenbaum is joining the company’s board. DITTO plans to use the new funds to further develop its technology, add to its team, and market to customers.

Instead, the company is focused on building games for smartphones.

“We are maintaining the old games, like Happy Aquarium, but we don’t build new Facebook PC games any more — we are 100 percent focused on mobile,” Relan said.

Last year, he said, 90 percent of the company’s revenues came from Facebook, but he predicts that this year 90 percent will come from mobile.

CrowdStar’s decision to leave Facebook is bad timing for the social network it as nears its public offering.

A platform must have both a lot of applications and a lot of users in order to be successful, but if the perception is that the platform can be profitable only for a few, developers will go elsewhere. Today, the reality is that Zynga dominates the charts and makes far and away more money than anyone else. Meanwhile, fledgling developers are seeking financial alternatives.

Founded in 2008, the Burlingame, Calif., company was one of the first to feed off of Facebook’s social graph, which allowed companies to endlessly post messages on players’ walls to get the word out about their games. Since those viral channels were shut down, Crowdstar has had a difficult time keeping up with social game leaders, such as Zynga, Electronic Arts, Wooga and King.

A year ago, the company raised its first round of funding totaling $23 million, but since then, its games have slipped in the rankings as its focus has shifted to mobile. Today, it attracts fewer than 8 million monthly users, down from 29 million a year ago, according to AppData.

Since then, said Relan, they have discovered an attractive audience on mobile, consisting of females age 13 to 30 who are not interested in sitting in front of a PC or a console to play games. “They are very mobile and communications-oriented,” he said.

For example, Crowdstar’s Girl franchise, including Top Girl, Social Girl and Modern Girl, has collectively hit 20 million downloads across both iPhone and Android. Modern Girl alone surpassed two million downloads within three weeks of its launch.

The Girl franchise includes role-playing games where users dress up avatars and are judged on their outfits as they walk the runway.

Relan said Zynga has done a good job serving the females, aged 35 and over, who grew up on PCs and enjoy playing games online. But the slightly younger demographic is looking for a different kind of game play on a different platform. Relan said they still will leverage the Facebook platform on mobile.

The decision to pull away from Facebook on the PC is new since the company announced a three-prong strategy in October that included Facebook games, mobile games and an emphasis on Asia.

Relan said that even if the company weren’t targeting a niche that gravitated toward mobile, he’d still be wary of developing games for Facebook. That’s because he believes the audience for Facebook games has plateaued or started to decrease.

“If I was going after an older audience, I might focus on tablets,” he said.

Chirpify is announcing today that it has raised $1.3 million in capital to build a payment platform on top of the popular microblogging service.

Investors in the round include Voyager Capital of Seattle and other angels, including Seattle’s Geoff Entress, BuddyTV CEO Andy Liu, former Facebook executive Rudy Gadre, HootSuite CEO Ryan Holmes and TiE Oregon Angels.

In addition to announcing the funding, the Portland, Ore., company said it is rolling out a payment platform specifically for digital content, where musicians can sell songs and concert tickets on Twitter.

“Twitter is a tremendous platform for brands, retailers, politicians, musicians and others to engage fans, yet with more than 140 million users there’s still no way to directly exchange goods and currency,” said Ryan Holmes, who invested in the round.

Here’s how Chirpify’s new digital content service will work:

Artists upload content to their to Chirpify dashboard, and then tweet out a message. Consumers then use Chirpify to link their PayPal account to their Twitter account. To buy a song, users would only have to reply to a tweet, saying that they are interested.

Chirpify then sends a message back with a link to the download.

The experience seems a little clunky because of the additional steps a consumer would have to take to link their PayPal account to the Twitter service. But if merchants provide enough compelling content for sale, it’s possible that consumers will adopt it.

The platform works similarly for other merchants and nonprofits, where messages are sent back and forth between the merchant and the consumer. Chirpify is free, and charges a 4 percent commission rate on each sale.

The company was founded by Chirpify CEO Chris Teso last year. Before Chirpify, Teso founded theGOOD, and has been a creative director at several advertising agencies.

Investors participating in the round include GGV Capital and Greylock Partners. The Mountain View, Calif., company said it will use the money to expand and hire additional employees.

Business models like Citrus Lane’s are getting pretty popular. Members sign up for a monthly subscription and get a package of products in the mail based on a particular theme.

My colleague Lauren Goode recently wrote about how Birchbox.com was branching out from sending beauty products to women to sending grooming products and consumer-tech gadgets for men. And, there are plenty of apparel companies that are also trying out the model, including Shoedazzle.

Citrus Lane’s box costs $25 a month, and offers two different versions — one for pregnant women and another for young children and parents. Contents include four to five items based on the child’s age — newborn to three years old — and include toys, snacks and other activities.

Citrus Lane Announces $5.1 Million Series A Funding from GGV Capital and Greylock Partners

Helps Parents Discover ‘Best Of’ Products For Little Ones

Mountain View, CA (April 25, 2012) – Citrus Lane (www.citruslane.com), a subscription e-commerce site that is focused on getting useful, developmentally appropriate and delightful products to young families, today announced that it has raised $5.1 million in Series A funding from GGV Capital and Greylock Partners. The company will use the funds to continue to expand its business and add critical new hires.

Each month, Citrus Lane members receive a care package of four to five “best of” products based on their child’s age for $25 per month. Citrus Lane curates its recommendations from partner brands such as Green Toys, Weleda, Zoli and Episencial.

All products are vetted by real moms. Citrus Lane also provides members with monthly editorial tips and insights and an active, vocal Facebook community of moms.

Founders Mauria Finley and Claire Hough are former executives of companies such as eBay, PayPal and NexTag that defined the first generation of Internet commerce companies. Citrus Lane combines a new generation of ecommerce with a social experience to provide a vibrant online community as well as a distribution platform for its partner brands.

“We’re building a company that helps moms – and dads – discover the best products for their babies and toddlers with the help of a trusted resource,” said Mauria Finley, founder and CEO of Citrus Lane. “We’re thrilled to have the support of Greylock and GGV Capital – they understood our business from the start and will be important partners as Citrus Lane continues to grow.”

Citrus Lane raised a seed round of financing in March 2011 and shipped its first boxes in July 2011.

“Citrus Lane is all about customer engagement. Build-and-grow models like Citrus Lane that focus on great service and consistent, long-term
word-of-mouth growth create the best opportunity for sustained growth,” said Jeff Richards, Partner, GGV Capital and new Citrus Lane board member. “We’re excited to be working with the company and look forward to working with them as they become the leader in subscription commerce.”

If the company is successful, it will have quadrupled its worth since raising $100 million at a $1 billion valuation only 10 months ago.

While that would be astonishing for a three-year-old company, it’s important to note that negotiations continue, and that investors could ultimately value the company at a slightly more modest number (hmm, like $3 billion?!).

A Square spokesman declined to comment.

Square, which was founded by Twitter inventor Jack Dorsey, has quickly made accepting credit cards via a mobile phone into a mainstream and affordable concept for small merchants.

Over the past year, it has quickly expanded beyond handing out magnetic-swipe readers to offer more robust experiences for both consumers and merchants, including software on the Apple iPad that acts like a register, and software on the iPhone that is a virtual wallet.

The payments method has received a warm reception from mostly small businesses, including taxicabs, food trucks, coffee shops and even lawyers and accountants.

The rumors of Square looking to raise more capital started spreading after Owen Thomas, formerly of the Daily Dot, noticed that Dorsey and Square’s COO Keith Rabois were in Boston and Baltimore, where many institutional investors are based. Thomas called Legg Mason, which confirmed it was looking at the San Francisco company.

Previous investors in Square’s three rounds, totaling roughly $137 million, include Kleiner Perkins Caufield & Byers, Tiger Global Management, Sequoia Capital, Khosla Ventures, Visa and well-known entrepreneur Richard Branson.

The big question is whether Square will be able to demand such a hefty valuation.

To determine that, based on what is known about the company, I did some back-of-the napkin calculations to come up with its annual revenue.

Last month, the company said it is now processing $4 billion in annual transactions. Since we know that Square charges 2.75 percent per swiped transaction, and 3.5 percent plus 15 cents per keyed-in transaction, we can start to get a better picture of its finances.

Let’s assume that a quarter of the company’s transactions are keyed in — which demands the higher rate. That would mean the company’s revenue would total nearly $83 million for swiped transactions, and $35 million for keyed-in transactions. Because of the additional 15-cent fee per transaction, let’s add another $15 million (which might be generous, but would break down to 100 million transactions at $10 apiece).

In all, the company’s annual revenue would then be close to $122 million.

Most, but not all of that revenue, is then handed over to the credit card companies for processing fees.

To be sure, the company has grown quickly since its inception, and has its eyes set on the very large point-of-sales market. This year, Square said it had plans to expand internationally, and has just hired a new executive from PayPal to take the lead on the effort. In the future it could also generate revenue from advertising or other loyalty programs, although it does not today.

But, by at least one historical measure, the valuation is rich beyond belief.

PayPal, which was also looking to disrupt the banking industry by enabling peer-to-peer payments online, was sold for $1.5 billion to eBay in 2002, just months after going public at a valuation of nearly $800 million.

At the time it went public, the company was roughly doubling year over year and had generated $103.7 million in 2001, its first full year of operations — or slightly less than Square’s estimated revenues.

Much like PayPal back then, Square faces intense competition, making alliances with much larger companies or raising big war chests critically important.

Square faces stiff competition and pricing pressure from Intuit, eBay’s PayPal, Google and other upstarts, like Pay Anywhere.

Still, it has made a splash that is seeing major reverberations around the sector, which a big valuation will make larger still.

The partnership and funding is a huge vote of confidence for the brand, which up until today only existed on the Internet.

If you haven’t seen the ads and don’t already know, Bonobos is known for “better-fitting” men’s pants, and while I’ve heard many men say it’s true, it’s apparently hard to explain why — sort of like why the company is named after a kind of over-sexed chimpanzee. Wait, maybe it’s not that difficult to understand. Ahem.

To be sure, the company has a large selection of nice pants.

Bonobos said the round of funding was led by Nordstrom, along with full participation from existing investors, such as Accel Partners and Lightspeed Venture Partners.

In a statement, Andy Dunn, founder and CEO of Bonobos, said “We understand there are people who still want to touch and feel clothing before they purchase. We realized we needed help expanding beyond our web-only roots.”

Since launching in 2007, Bonobos has expanded to offer a full clothing line for men. Beginning in April, Nordstrom will carry the top two product lines of Bonobos, including chinos and cotton trousers. The brand will launch at 20 of Nordstrom’s stores and within the Men’s Shop on Nordstrom.com.

“Our investment with Bonobos will enable Nordstrom to participate in the young company’s phenomenal growth, and we look forward to what we can learn from each other as we build the business together,” said Jamie Nordstrom, president of Nordstrom Direct.

Last March, Nordstrom acquired HauteLook, an online retailer that offers flash sales.

Like Bonobos, several venture-backed companies have cropped up over the past couple of years that encourage men to shop more online, such as Indochino, J. Hilburn and TrunkClub. In December 2010, Bonobos raised $18.5 million.