FORTUNE — After a fundraising process that lasted several months, Square, the fast growing mobile payments startup, said on Monday that it has raised more than $200 million in a new round of financing. The investment values the company at approximately $3.25 billion, according to a person with knowledge of the transaction, or roughly double its valuation following a $100 million financing round in the summer of 2011.
Square also said that it is now processing payments at a rate of $8 billion annually, up from about $2 billion last October.
Square, whose mobile payment technologies are making it ever easier for consumers to do away with cash, began its fundraising effort this spring. People close the company said its executives were hoping that a successful IPO from Facebook (FB) might help Square raise cash more easily and at a high valuation. But after the Facebook IPO turned into a fiasco, many technology investors became more skittish. It is not clear if that sentiment affected Square’s fundraising process.
The additional cash will help Square to fend off stiff competition from tech giants like Google (GOOG) and PayPal, financial industry firms like VeriFone (PAY) and NCR (NCR), and a slew of retailers, mobile carriers and others who vying for a piece of the small, but fast growing, mobile payments market.
Square’s investors include Citi Ventures, the venture capital arm of Citigroup (C), Rizvi Traverse Management, and Starbucks Coffee (SBUX). Square announced the Starbucks investment in August, when the two companies unveiled a deal under which Square will process credit cards payments at the coffee chain’s stores in the United States. A likely investment from Rizvi, a small private equity firm, was reported in July by The New York Times.