Chris Heaslip had a big gain and a big loss in his business over the past year.
The gain was on the financial front.
Pushpay – the mobile payments company he co-founded with Eliot Crowther in 2011 – more than doubled in value over the final half of 2017, then held those gains over the first six months of 2018 for a market cap of just over $1 billion.
Its buoyant performance on the NZX came on the back of strong results. Pushpay reported a revenue increase of 105% for its 2018 financial year to $US70.2m, meeting guidance. Its loss narrowed 9% to $US23.3m, and cash-flow breakeven is forecast for the first half of its 2019 year.
Mr Heaslip’s big loss was the departure of Mr Crowther in June. The co-founder resigned, and sold his stake, worth $108 million at the same time.
As Mr Crowther departed, Pushpay also said it had abandoned its goal to list on the Nasdaq within 12 months.
However, by Mr Heaslip’s account, his co-founder’s exit was for family reasons, and nothing to do with the direction of the business.
Mr Crowther had encountered a “significant personal situation.”
The entrepreneur, who is now based in the US, wanted to spend more time with his family.
That phrase has become something of a cliché, but Heaslip says it’s true in this case.
“Eliot’s been going through a tough situation these last couple of years. Being part of a high-growth start-up is an extremely large investment of your time and it can be hard to balance all the different needs alongside that. So he made that decision to personally leave,” the cofounder told NBR.
He added, “it’s a very amicable situation moving forwards.”
Brought up in a single-parent family, Heaslip says his mother made “some tremendous sacrifices” taking on three jobs at one stage to give him the same lifestyle that others kids had. “She drilled into me from an early age that I had to have a job that could pay the bills.”
Armed with a masters in taxation accounting from Auckland University, one of his first roles was with the IRD as a taxation inspector, which he credits with giving him a through grounding in business.
Today he is chasing a dream that began in 2011 when he Mr Crowther both chipped in $40,000 and mortgaged their houses to create a mobile app that enables rapid and secure payments between registered merchants and customers.
Admitting that it was probably the 15th idea he’d worked on, Heaslip says “the persistence to get back up and give it another go I think is really critical.”
Officially launched in late 2012, a cash-strapped Pushpay was in danger of folding just 12 months later when the company turned down an offer of $600,000 from a US venture capitalist. “If there’s one thing worse than running out of money” says Heaslip, “it’s taking money from someone you don’t want to be in business with.”
The business was saved by a $2 million cash injection on Christmas Eve in 2013 after a fortuitous meeting with Rich Lister Peter Huljich whose family bought into Pushpay’s vision.
All up, the Huljich family invested more than $20 million. Today, its 22.5% stake (down from a high of 27% in April after some profit-taking) has a market value of around $240 million.
Pushpay’s 350 staff are divided between Auckland and Redmond, Washington, and its target market is America’s faith sector, which comprises some 340,000 churches and religious organisations that collect more than $US115 billion in donations every year, much of it in cash on a Sunday.
The Pushpay business model is based on collecting a monthly recurring software fee and a small percentage of each transaction. By taking the perceived ‘friction’ out of giving with mobile payments, and helping churches with messaging and invoicing, Pushpay is tapping into an estimated US revenue stream of $US1.6 billion annually.
Its sharply rising revenue growth saw the Pushpay recognised in 2016 when it topped the Deloitte Fast 50. The company also also took out the 2017 PwC Hi-Tech Company of the Year Award.
Moving to the US with two young children (both he and Crowther live in Seattle) has involved sacrifices and culture shock but was critical to understanding the American market.
Although the company still draws almost all its revenue from the faith sector, Heaslip has plans to expand into non-profit organisations and the private schools.
The cofounder says moving into those two areas will widen Pushpay’s addressable market to $US5.5 billion.