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Pushpay to raise $9m ahead of NZAX listing

Pushpay, the mobile payment app developer, will raise $9 million in a private share issue before it seeks a compliance listing on the New Zealand Alternative Index in July.

The Auckland-based company will raise the new equity issuing shares at $1 each, boosting the total number of company shares to 50 million, and valuing it at $50 million, it said in a statement. The capital raise is underwritten by cornerstone shareholders Christopher and Banks Private Equity, an investment vehicle for the Huljich family. The app developer also plans to join the NZAX in a compliance listing next month, meaning it won't raise any new capital.

"The private share issue will enable Pushpay to scale its global expansion strategies, particularly in the USA," chief executive Chris Heaslip said. "Mobile commerce currently comprises 4 percent of global credit and debit card transaction volume. The non point of sale payments sector is under-served, with both consumers and merchants demanding payment solutions that are easy, fast and secure."

Last December the company raised $5.1 million in two tranches, which saw the Huljich family take a 23 percent stake. Established in 2011, PushPay last year also attracted $1 million in backing from Douglas Kemsley, the Hamilton-based former chairman of internet and cloud services provider Maxnet, and a $253,000 development grant from the government's Callaghan Innovation Fund.

Heaslip said the company's "transaction volume" was increasing 20 percent month-on-month and current "annualised payments volume" at more than $35 million, up from $17 million in February.

Pushpay has appointed Buddle Findlay as legal adviser and plans to appoint Harmos Horton Lusk as its NZAX sponsor.


Comments and questions

$35m of payment volumes, what % do they take?

Interesting model to list without a broker, or did the brokers turn them down ?

As this will be a compliance listing, not raising capital via the listing a broker is not really necessary. They do have an approved sponsor whose reputation should be on the line if this does not work.

The issue will be whether or not the lack of brokers input will limit trading activities post listing.

This looks very similar to the GeoOp listing.

I wonder if the shares will perform the same in the first week.

Say 700k/annum of revenue (2% of 35M), = 50M...? I guess that's ONLY 71 times revenue.... you're buying a lot of blue sky.... (at least their revenue at listing would be twice what GeoOp listed with.....)

That was my thinking, someone (a customer) must know what they charge.

Also they are buying Run the Red a marketing company so revenues will be higher. But the multiple for the Push Pay business will still be over 50 is my guess. Will need to see a lot of growth to justify that.

Look at Serko - $6m of revenues growing to $11 and valued at around $67m. Similar type of model in some ways - small fee on high volume / value transactions.

I would back Serko over this.

The combination of $5m in mobile messaging revenues (Run The Red) and the $35m in payments ('20 percent month-on-month' growth) doesn't seem a terrible start for a SaaS payments company.

Good luck to them. No-one thought Xero would be a good investment initially either...