One of the premier venture capital companies, Khosla Ventures ha reportedly agreed to invest in the new start-up firm, Square, which is the brainchild of Jack Dorsey, who is the creator of the micro blogging sensation, Twitter. The first round of venture capital saw about $10 million being raised as investment funds for Square and after the first round, the start up was valued at whopping $40 million even before its launch.

One of the known face at the first round investments was Gideon Yu, the former Chief Financial Officer of Facebook who is now a part of Khosla Ventures. As per the sources close to the subject, there are other eager investors who are now joining the investment rounds for Square. One of the primary reasons for such high interest in the Square is the opportunity of extended returns that the service is believed to reel in.

Square is essentially a service for the smart phones, that enable the users to use their credit cards directly on their phones via the Square attachment and then make payments online. Some of the leading credit card companies such as, Visa, Master card and American Express have already given their go ahead for Square to accept payments. The most beneficial of all things that Square will provide is the fact that, it will enable the users to create virtual merchant accounts, just as in Paypal and then accept credit card payments for just about any legitimate service business they run.

Via Venture Beat.