NZX-listed mobile payments provider, Pushpay Holdings (NZSX: PAY), says it expects to reach its $100 million annualised committed monthly revenue (ACMR) target prior to the end of December 2017, eight months sooner than its initial forecast and 28 months after passing the $10 million mark. (The company notes that Xero grew from $10 million to $100 million of ACMR in around 42 months.)
Pushpay calculates its ACMR as being the average revenue per merchant, multiplied by the number of merchants. Average revenue per merchant is a combination of subscription fees and volume fees, with volume fees averaged over 12 months to reduce the effect of seasonal peaks.
This formula was devised by US entrepreneur Jason Lemkin (described on his LinkedIn page as “media giant & hyper-founder-centric SaaS-only VC”) to measure the growth of SaaS companies. He defines a ‘hyper-growth’ SaaS company as one that grows from $US1m ACMR to $US10m in less than five months.
A report on Pushpay from NZ investment brokers Clare Capital in July 2015 said Pushpay was likely to achieve that in less than four months. However, Pushpay was reporting in $NZ at that time. It changed its presentation currency from $NZ to $US from 1 April 2016 so has restated its ACMR target as $US72 million. Its ACMR increased 39.22 percent over the three months to 30 June 2016, reaching $US27.29m.
Pushpay CEO, Chris Heaslip, said the company was refining its strategy, focusing on attracting larger merchants with the resources to maximise implementation, which it expect to lead to higher engagement and higher retention.
“To complement this, the company continues to invest in a more targeted marketing strategy, shifting away from transactional sales techniques and towards relational sales techniques and investing in sales training,” Heaslip said.
Pushpay says it provides mobile commerce tools that facilitate fast, secure and easy non-point-of-sale payments between consumers and merchants. It serves three target markets: the ‘faith sector’, non-profit organisations and enterprises, from SMEs to corporates.
The company was founded in New Zealand in 2011 by Heaslip and Eliot Crowther and later moved its HQ to the US. Its initial target market was churches where it facilitated donations from community members. Pushpay went public on the New Zealand Alternative Exchange (NZAX) on August 14, 2014 with a $50 million IPO and moved to the NZX main board on June 9, 2015.