Investor Presentation | March 2016 - NZX.com
Investor Presentation | March 2016
Pushpay Holdings Limited, Level 6, 167 Victoria Street West, Auckland 1010, New Zealand | www.pushpay.com
1
Important notice This presentation is given on behalf of Pushpay Holdings Limited (Pushpay) – Company number: 3481675 | NZSX:PAY. Information in this presentation: • is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Pushpay and is not financial or investment advice to any person. Any person who is considering an investment in Pushpay should undertake his or her own independent analysis and seek appropriate professional advice from his or her legal, financial, tax and/or business advisor(s); • should be read in conjunction with, and is subject to, Pushpay’s Annual Report, market releases, and information published on Pushpay’s website www.pushpay.com; • is a summary only, and not a complete description of Pushpay and its business; • includes forward-looking statements about Pushpay and the environment in which Pushpay operates, which are subject to uncertainties and contingencies outside of Pushpay’s control – Pushpay’s actual results or performance may differ materially from these statements; • includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and • may contain information from third parties believed to be reliable; however, no representations or warranties are made as to the accuracy or completeness of such information or any other information contained of referred to in this presentation. All information in this presentation is current at the date of this presentation, unless stated otherwise. All currency amounts are in NZ dollars unless stated otherwise. 2
Contents
1.
The problem
2.
The Pushpay solution
3.
Typical results
4.
How we make money
5.
Company results to date
6.
Conclusion
3
Overview Pushpay provides mobile commerce tools that facilitate fast, secure and easy non point of sale payments between consumers and merchants. Pushpay targets merchants who are looking to offer convenient, personalised and intuitive payment solutions to their consumers. Pushpay services three target markets: the faith sector; non-profit organisations and enterprises (both small medium enterprises and corporate organisations). • Large under-serviced vertical - focusing on the US faith sector, an under-serviced vertical consisting of 314,000 churches and 157 million church-goers • Consistent Merchant ACMR growth - $20.40 million as at 31 December 2015 an increase of $6.43 million over the quarter and on track to increase by over 100% to more than $28 million in the six months to 31 March 2016 • Two revenue streams - volume fees (a percentage of payment transaction volume) and subscription fees (a monthly fee usually based on merchant size) • SaaS Hyper-Growth - went from $1 million to $10 million Annualised Committed Monthly Revenue (ACMR) within 10 months and now targeting $100 million ACMR by August 2018 • Targeted marketing - four key brands: Pushpay (parent company, payments brand); eChurch (faith sector sales brand); ZipZap Processing (payments processing brand); and Run The Red (SMS gateway brand) • Talented and driven team - 193 staff as at 31 December 2015 across Seattle and Auckland supported by a high quality senior management team and a dynamic and experienced board • Funding - raised $13.8 million in June 2015 through a fully underwritten Entitlement Offer and $18.8 million in October 2015 through a Private Placement • Our mission - to become the global mobile platform of choice for merchants and consumers in non-point of sale (non-POS) mobile commerce
4
Ba
nk
Ch
eq ue B
oo k
Churches and Non-Profit Organisations have not kept up with technology
Credit itt CrreeddCard i C C Caarrd S. D. Fitzgerald Expires 31 December 1951 51 1 ber 19 er 195 Expires 31 Decem ecemb D 1 3 s Expire
5
Amazon and church e-commerce transactions
13%
70%
Last Christmas season Amazon had around 70% of customers shop using a mobile device
Churches that offer online giving had just 13% of revenue given online
Sources: Amazon.com, Inc (2015, December). Amazon Celebrates a Record-Setting Holiday for Prime, Amazon Original Series and Amazon Devices Dunham + Company (2015, April). Study shows churches lag behind in facilitating online giving
6
Amazon and church e-commerce transactions Amazon e-commerce transactions
100%
Amazon mobile transactions Church e-commerce transactions
70%
The opportunity
13% Sources: Amazon.com, Inc (2015, December). Amazon Celebrates a Record-Setting Holiday for Prime, Amazon Original Series and Amazon Devices Dunham + Company (2015, April). Study shows churches lag behind in facilitating online giving
7
The Pushpay solution People • We continue to attract high quality, driven staff throughout the business and over the year to 31 December 2015 we increased our Staff Headcount by 211% to 193 as at 31 December 2015 from 62 as at 31 December 2014. As at 31 December 2015, Pushpay had 51 staff based in New Zealand and 142 staff based in the USA. • Over the half year, Pushpay also attracted Shane Sampson to the position of Chief Financial Officer following an international search that generated extensive interest in the position. • Our focus has been on product market fit, we are continually building out our development team. As at 31 December 2015 we had 36 people in our development team up from 17 people as at 31 December 2014. • We have also invested in our sales and marketing team which has increased substantially over the year. As at 31 December 2015 we had 67 people in our sales and marketing team up from 8 people as at 31 December 2014.
8
The Pushpay solution Product and processes • eChurch Apps is a custom app building solution that allows churches to create and customise their own branded apps for iOS and Android. • Pushpay Fastpay™ allows app vendors to integrate a five second giving experience into their mobile apps with very little configuration. • Virtual Terminal/Envelope Giving expands Pushpay’s digital giving feature set for our main target market – the USA Faith Sector. This feature allows church administrators to process envelope-based credit card, debit card and ACH payments through Pushpay. • Pushpay has continued to invest in developing scale in all areas of the business. Building on top of the implementation of Salesforce in early 2015 Pushpay has implemented marketing automation, and outbound sales team management platforms. We are currently working on building efficiency and scale in to our finance and customer support functions.
9
Case study A church in the US with around 7,000 people implemented Pushpay and they saw: Average increase in giving per person per month $146.11
$397,268.13
$90.62
Increase in donations per annum
$20.03 Consistent givers
Intermittent givers
New givers 10
Fee revenue
Volume fees
Subscription fees
Based on payment transaction volume (in the case of the Faith Sector, this is calculated as a percentage of total donations).
Based on the size of the Merchant (in the case of the Faith Sector, this is a fixed monthly fee usually based on the total number of church attendees).
11
Cash flow growth requires investment Company cash flow based on different growth rates $2,500,000
Growth rate: 2 more customers per month Growth rate: 5 more customers per month
Customer Acquisition Cost (CAC): $6,000 CASH FLOW (NZD)
Growth rate: 10 more customers per month
$2,000,000
$1,500,000
Monthly Recurring Revenue: $500 Note: CAC only includes Sales, Marketing and Implementation Costs
$1,000,000
$500,000
MONTHS 5
10
15
20
$0 25
30
35
-$500,000
-$1,000,000
Note: This represents three hypothetical scenarios and does not represent Pushpay’s cash flow forecast
12
Pushpay’s ACMR growth Merchant ACMR
$28.00m
Forecast Merchant ACMR
$20.40m
$13.97m
$9.02m
$5.33m $3.06m $0.71m
$0.82m
30 Jun 14
30 Sep 14
31 Dec 14
31 Mar 15
30 Jun 15
30 Sep 15
31 Dec 15
31 Mar 16
13
LOCATION OF PUSHPAY’S USA MERCHANTS
Location of Pushpay’s Merchants in North America* Merchant
Source: Pushpay (2015, June)
Merchant
Alaska Canada
Seattle, Washington, USA Office Continental USA
Hawaii
Mexico
14 *
Includes locations in North America of all Merchants which have been added to the Pushpay platform since inception through to 31 December 2015.
Monthly Recurring Revenue (MRR) over time Pushpay*
$1,500
Trend Forecast
MRR (US$,000)
$1,250
Slack
December 2015
Yammer
$1,000
Workday
$750 Intercom Box
$500
$250
$0 0
6
12
18
24
Months since launch * “Launch date” used is January 2014 when Pushpay’s Co-founders moved to the US and its US office was established in Seattle, WA.
30
36 15
Company summaries and valuations Slack - Slack brings all your communication
Intercom - Intercom is one place for every team
together in one place. It’s real-time messaging, archiving and search for modern teams.
in an internet business to communicate with customers, personally, at scale—on your website, inside web and mobile apps, and by email.
Valuation: US$2.8 billion as at 16 April 2015
Valuation: US$500 million as at 30 August 2015
Yammer - Yammer is a private social network that helps employees collaborate across departments, locations, and business apps. Valuation: Purchased by Microsoft for US$1.2 billion in June 2012
Box (NYSE:BOX) - Box offers secure content management and collaboration for individuals, teams and businesses, enabling secure file sharing and access to your files online. Valuation: US$1.6 billion as at 28 November 2015
Workday (NYSE:WDAY) - Workday offers enterprise-level software solutions for human resource and financial management Valuation: US$15.98 billion as at 28 November 2015
16
Q3 performance highlights
$20.40m Merchant ACMR
193 Staff Headcount
46.03% increase over quarter
34.97% increase over quarter
2,860 Total Merchants
$19.73m Cash and available funding lines
$594 per month
Less than 12 months
Average Revenue Per Merchant (ARPM)
Customer Acquisition Cost (CAC)
36.06% increase over quarter
34.97% increase over quarter
>95% Annual Revenue Retention Rate (Retention)
17
Customer Lifetime Value (LTV)/CAC Ratio LTV/CAC Ratio 17
CAC = 95% Annual Revenue Retention Rate (Retention)
>3
SaaS aspiration Source: Saasmetrics (2016). Customer Acquisition Cost http://saasmetrics.co/customer-acquisition-cost/
Pushpay 18
Talented and driven team Board
Bruce Gordon
Graham Shaw
Christopher Huljich
Independent Chairman
Independent Director
Non-executive Director
Doug Kemsley
Chris Heaslip
Eliot Crowther
Peter Huljich
Non-executive Director
CEO, Executive Director and Co-founder
Sales, Executive Director and Co-founder
Alternate Director for Christopher Huljich
Senior Management 193 staff across Seattle, WA, USA and Auckland, New Zealand (as at 31 December 2015)
19
Track record of success
31 December 2014 targets achieved
$4m standby funding facility secured
69.2% increase in ACMR over the quarter
30 September 2015 target exceeded Raised $18.8 million in a Private Placement
2015
36
MONTHS
Graham Shaw and Peter Huljich join the Board Touch ID and card scanning introduced to App
31 March 2015 target exceeded
$13.8m fully underwritten Entitlement Offer completed Migrated listing to the NZX Main Board Received R&D Project Grant from Callaghan Innovation
Target of $100m ACMR within 36 months to August 2018
20
Market opportunity in the USA
314,000 Faith Sector (Churches)
1.4 million Non-Profit Organisations (NPOs)
5.6 million Enterprises (5.6 million SMEs and 17,671 Corporate Organisations)
Sources: US Census Bureau (2012). Statistical Abstract of the United States: 2012 Urban Institute (2014). The Nonprofit Sector in Brief 2014: Public Charities, Giving, and Volunteering Note: Numbers rounded
21
Coming soon from the Pushpay labs Can we bring the simplicity and convenience of church donations to the world of bill payments?
10
seconds
1. Receive Notification
2. Bill details pre-populated
3. Use fingerprint and bill paid in
Pushpay Holdings Limited, Level 6, 167 Victoria Street West, Auckland 1010, New Zealand | www.pushpay.com
1
Important notice This presentation is given on behalf of Pushpay Holdings Limited (Pushpay) – Company number: 3481675 | NZSX:PAY. Information in this presentation: • is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Pushpay and is not financial or investment advice to any person. Any person who is considering an investment in Pushpay should undertake his or her own independent analysis and seek appropriate professional advice from his or her legal, financial, tax and/or business advisor(s); • should be read in conjunction with, and is subject to, Pushpay’s Annual Report, market releases, and information published on Pushpay’s website www.pushpay.com; • is a summary only, and not a complete description of Pushpay and its business; • includes forward-looking statements about Pushpay and the environment in which Pushpay operates, which are subject to uncertainties and contingencies outside of Pushpay’s control – Pushpay’s actual results or performance may differ materially from these statements; • includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and • may contain information from third parties believed to be reliable; however, no representations or warranties are made as to the accuracy or completeness of such information or any other information contained of referred to in this presentation. All information in this presentation is current at the date of this presentation, unless stated otherwise. All currency amounts are in NZ dollars unless stated otherwise. 2
Contents
1.
The problem
2.
The Pushpay solution
3.
Typical results
4.
How we make money
5.
Company results to date
6.
Conclusion
3
Overview Pushpay provides mobile commerce tools that facilitate fast, secure and easy non point of sale payments between consumers and merchants. Pushpay targets merchants who are looking to offer convenient, personalised and intuitive payment solutions to their consumers. Pushpay services three target markets: the faith sector; non-profit organisations and enterprises (both small medium enterprises and corporate organisations). • Large under-serviced vertical - focusing on the US faith sector, an under-serviced vertical consisting of 314,000 churches and 157 million church-goers • Consistent Merchant ACMR growth - $20.40 million as at 31 December 2015 an increase of $6.43 million over the quarter and on track to increase by over 100% to more than $28 million in the six months to 31 March 2016 • Two revenue streams - volume fees (a percentage of payment transaction volume) and subscription fees (a monthly fee usually based on merchant size) • SaaS Hyper-Growth - went from $1 million to $10 million Annualised Committed Monthly Revenue (ACMR) within 10 months and now targeting $100 million ACMR by August 2018 • Targeted marketing - four key brands: Pushpay (parent company, payments brand); eChurch (faith sector sales brand); ZipZap Processing (payments processing brand); and Run The Red (SMS gateway brand) • Talented and driven team - 193 staff as at 31 December 2015 across Seattle and Auckland supported by a high quality senior management team and a dynamic and experienced board • Funding - raised $13.8 million in June 2015 through a fully underwritten Entitlement Offer and $18.8 million in October 2015 through a Private Placement • Our mission - to become the global mobile platform of choice for merchants and consumers in non-point of sale (non-POS) mobile commerce
4
Ba
nk
Ch
eq ue B
oo k
Churches and Non-Profit Organisations have not kept up with technology
Credit itt CrreeddCard i C C Caarrd S. D. Fitzgerald Expires 31 December 1951 51 1 ber 19 er 195 Expires 31 Decem ecemb D 1 3 s Expire
5
Amazon and church e-commerce transactions
13%
70%
Last Christmas season Amazon had around 70% of customers shop using a mobile device
Churches that offer online giving had just 13% of revenue given online
Sources: Amazon.com, Inc (2015, December). Amazon Celebrates a Record-Setting Holiday for Prime, Amazon Original Series and Amazon Devices Dunham + Company (2015, April). Study shows churches lag behind in facilitating online giving
6
Amazon and church e-commerce transactions Amazon e-commerce transactions
100%
Amazon mobile transactions Church e-commerce transactions
70%
The opportunity
13% Sources: Amazon.com, Inc (2015, December). Amazon Celebrates a Record-Setting Holiday for Prime, Amazon Original Series and Amazon Devices Dunham + Company (2015, April). Study shows churches lag behind in facilitating online giving
7
The Pushpay solution People • We continue to attract high quality, driven staff throughout the business and over the year to 31 December 2015 we increased our Staff Headcount by 211% to 193 as at 31 December 2015 from 62 as at 31 December 2014. As at 31 December 2015, Pushpay had 51 staff based in New Zealand and 142 staff based in the USA. • Over the half year, Pushpay also attracted Shane Sampson to the position of Chief Financial Officer following an international search that generated extensive interest in the position. • Our focus has been on product market fit, we are continually building out our development team. As at 31 December 2015 we had 36 people in our development team up from 17 people as at 31 December 2014. • We have also invested in our sales and marketing team which has increased substantially over the year. As at 31 December 2015 we had 67 people in our sales and marketing team up from 8 people as at 31 December 2014.
8
The Pushpay solution Product and processes • eChurch Apps is a custom app building solution that allows churches to create and customise their own branded apps for iOS and Android. • Pushpay Fastpay™ allows app vendors to integrate a five second giving experience into their mobile apps with very little configuration. • Virtual Terminal/Envelope Giving expands Pushpay’s digital giving feature set for our main target market – the USA Faith Sector. This feature allows church administrators to process envelope-based credit card, debit card and ACH payments through Pushpay. • Pushpay has continued to invest in developing scale in all areas of the business. Building on top of the implementation of Salesforce in early 2015 Pushpay has implemented marketing automation, and outbound sales team management platforms. We are currently working on building efficiency and scale in to our finance and customer support functions.
9
Case study A church in the US with around 7,000 people implemented Pushpay and they saw: Average increase in giving per person per month $146.11
$397,268.13
$90.62
Increase in donations per annum
$20.03 Consistent givers
Intermittent givers
New givers 10
Fee revenue
Volume fees
Subscription fees
Based on payment transaction volume (in the case of the Faith Sector, this is calculated as a percentage of total donations).
Based on the size of the Merchant (in the case of the Faith Sector, this is a fixed monthly fee usually based on the total number of church attendees).
11
Cash flow growth requires investment Company cash flow based on different growth rates $2,500,000
Growth rate: 2 more customers per month Growth rate: 5 more customers per month
Customer Acquisition Cost (CAC): $6,000 CASH FLOW (NZD)
Growth rate: 10 more customers per month
$2,000,000
$1,500,000
Monthly Recurring Revenue: $500 Note: CAC only includes Sales, Marketing and Implementation Costs
$1,000,000
$500,000
MONTHS 5
10
15
20
$0 25
30
35
-$500,000
-$1,000,000
Note: This represents three hypothetical scenarios and does not represent Pushpay’s cash flow forecast
12
Pushpay’s ACMR growth Merchant ACMR
$28.00m
Forecast Merchant ACMR
$20.40m
$13.97m
$9.02m
$5.33m $3.06m $0.71m
$0.82m
30 Jun 14
30 Sep 14
31 Dec 14
31 Mar 15
30 Jun 15
30 Sep 15
31 Dec 15
31 Mar 16
13
LOCATION OF PUSHPAY’S USA MERCHANTS
Location of Pushpay’s Merchants in North America* Merchant
Source: Pushpay (2015, June)
Merchant
Alaska Canada
Seattle, Washington, USA Office Continental USA
Hawaii
Mexico
14 *
Includes locations in North America of all Merchants which have been added to the Pushpay platform since inception through to 31 December 2015.
Monthly Recurring Revenue (MRR) over time Pushpay*
$1,500
Trend Forecast
MRR (US$,000)
$1,250
Slack
December 2015
Yammer
$1,000
Workday
$750 Intercom Box
$500
$250
$0 0
6
12
18
24
Months since launch * “Launch date” used is January 2014 when Pushpay’s Co-founders moved to the US and its US office was established in Seattle, WA.
30
36 15
Company summaries and valuations Slack - Slack brings all your communication
Intercom - Intercom is one place for every team
together in one place. It’s real-time messaging, archiving and search for modern teams.
in an internet business to communicate with customers, personally, at scale—on your website, inside web and mobile apps, and by email.
Valuation: US$2.8 billion as at 16 April 2015
Valuation: US$500 million as at 30 August 2015
Yammer - Yammer is a private social network that helps employees collaborate across departments, locations, and business apps. Valuation: Purchased by Microsoft for US$1.2 billion in June 2012
Box (NYSE:BOX) - Box offers secure content management and collaboration for individuals, teams and businesses, enabling secure file sharing and access to your files online. Valuation: US$1.6 billion as at 28 November 2015
Workday (NYSE:WDAY) - Workday offers enterprise-level software solutions for human resource and financial management Valuation: US$15.98 billion as at 28 November 2015
16
Q3 performance highlights
$20.40m Merchant ACMR
193 Staff Headcount
46.03% increase over quarter
34.97% increase over quarter
2,860 Total Merchants
$19.73m Cash and available funding lines
$594 per month
Less than 12 months
Average Revenue Per Merchant (ARPM)
Customer Acquisition Cost (CAC)
36.06% increase over quarter
34.97% increase over quarter
>95% Annual Revenue Retention Rate (Retention)
17
Customer Lifetime Value (LTV)/CAC Ratio LTV/CAC Ratio 17
CAC = 95% Annual Revenue Retention Rate (Retention)
>3
SaaS aspiration Source: Saasmetrics (2016). Customer Acquisition Cost http://saasmetrics.co/customer-acquisition-cost/
Pushpay 18
Talented and driven team Board
Bruce Gordon
Graham Shaw
Christopher Huljich
Independent Chairman
Independent Director
Non-executive Director
Doug Kemsley
Chris Heaslip
Eliot Crowther
Peter Huljich
Non-executive Director
CEO, Executive Director and Co-founder
Sales, Executive Director and Co-founder
Alternate Director for Christopher Huljich
Senior Management 193 staff across Seattle, WA, USA and Auckland, New Zealand (as at 31 December 2015)
19
Track record of success
31 December 2014 targets achieved
$4m standby funding facility secured
69.2% increase in ACMR over the quarter
30 September 2015 target exceeded Raised $18.8 million in a Private Placement
2015
36
MONTHS
Graham Shaw and Peter Huljich join the Board Touch ID and card scanning introduced to App
31 March 2015 target exceeded
$13.8m fully underwritten Entitlement Offer completed Migrated listing to the NZX Main Board Received R&D Project Grant from Callaghan Innovation
Target of $100m ACMR within 36 months to August 2018
20
Market opportunity in the USA
314,000 Faith Sector (Churches)
1.4 million Non-Profit Organisations (NPOs)
5.6 million Enterprises (5.6 million SMEs and 17,671 Corporate Organisations)
Sources: US Census Bureau (2012). Statistical Abstract of the United States: 2012 Urban Institute (2014). The Nonprofit Sector in Brief 2014: Public Charities, Giving, and Volunteering Note: Numbers rounded
21
Coming soon from the Pushpay labs Can we bring the simplicity and convenience of church donations to the world of bill payments?
10
seconds
1. Receive Notification
2. Bill details pre-populated
3. Use fingerprint and bill paid in
