Wednesday 23 November 2016 01:29 PM
Pushpay to buy church-app business for US$3.1M as first-half sales soar, loss widens
By Jonathan Underhill
Nov. 23 (BusinessDesk) - Pushpay Holdings, the mobile payments app developer, says it will acquire a church app business from Bluebridge Digital for US$3.1 million, continuing an expansion that saw revenue soar 308 percent in the first half while its net loss widened.
Bluebridge is one of the leading providers of church apps in the world and provides churches with "high-quality mobile apps, a scalable platform, intuitive content management system and mobile expertise". Pushpay will pay cash for the business after raising A$40 million in a private placement last month, ahead of its secondary listing on the ASX. It cited Giving USA figures showing US$119.3 billion was given to religious organisations in 2015, which it said amounted to a US$2.2 billion revenue opportunity that's expected to rise to US$3.1 billion in 2020.
Pushpay's operating revenue rose to $12 million in the six months ended Sept. 30, from US$2.9 million a year earlier, the Auckland-domiciled, Redmond, United States-headquartered company said in a statement. Its net loss widened to US$11.3 million from US$2.9 million.
Annualised committed monthly revenue rose to US$33.9 million from US$8.9 million, while total merchants rose to 5,286 from 2,102, it said. The company affirmed it is on track to reach ACMR of US$72 million ($100 million) and "breakeven on a monthly cash flow basis" in calendar 2017.
Puspay is targeting US churches with technology that makes it easy for congregations to make donations using their mobile phones and is also expanding its mobile payment app beyond the faith sector to helping people pay their utility bills such as water and insurance. Its headcount rose to 280 in the first half from 143 a year earlier while total expenses jumped by 158 percent to $23.4 million, including sales & marketing costs of $8.3 million.
Its net cash outflow from operations rose to $7 million from $4.4 million. Before the A$40 million of new capital raised last month, the company's cash on hand had dwindled to $667,000 at Sept. 30 from $8.4 million at March 31. Total cash and available funding fell about 30 percent to US$5.4 million.
Pushpay shares dropped 2.7 percent to $1.80 and have gained 5.7 percent this year.