Pushpay spends $215m on streaming platform to accelerate US growth

Monday, 23 August 2021

Streaming services are now a critical aspect of church engagement with their communities, Pushpay says.

Pushpay, the digital payment service for churches, is buying a streaming platform in the United States to accelerate its growth.

The company has agreed to pay US$150 million (NZ$215m) in cash and shares to buy Resi Media, it said in a statement to the NZX on Monday. It will take on US$90m of debt to help fund the purchase.

Pushpay counts more than half of the top 100 US churches among its customers and buying Resi will enable it to offer more services to new and existing customers. Resi is used by more than 70 per cent of the 100 largest US churches and is expanding its streaming service to corporate, education, sports and live event markets.

“Streaming services are now a critical aspect of church engagement with their communities, as they become increasingly focused on building a digital presence,” Pushpay said in presentation notes to investors.

There are “strong cross-sell opportunities between both Resi and Pushpay customers,” the company said.

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Pushpay was founded in Auckland by Christians Chris Heaslip and Eliot Crowther, who felt awkward when they did not have any cash to make a donation in church one day. It turned the corner in 2019, when it posted its first profit, although it continues to reinvest its cash for growth rather than pay dividends.

In the year to the end of March, Pushpay reported a 95 per cent lift in full-year profit to US$31.2m, as revenue rose 39 per cent to US$181.1m. In comparison, Resi doubled its revenue to US$17m from US$8.4m.

Pushpay said the acquisition is not expected to contribute materially to profits in the current financial year because Resi has increased employee numbers to support future growth.

Resi is being sued by BoxCast for patent infringement in the US, but Pushpay said patent litigation was not atypical in the US with thousands of cases filed every year.

Resi does not believe the claims are valid and the sellers have agreed to indemnify Pushpay for up to the full amount of the purchase prices for any losses or damages related to the case, Pushpay said.

Shares in Pushpay were up 1.2 per cent to $1.67 in mid-afternoon trading on the NZX.