REPORT PREPARED FOR: BY XI U QI N LI U, 1 4 6 3 3 4 9 GUANG HUI DUAN, 1 4 7 4 4 9 7 XI N LI , 1 4 8 8 9 1 6 MOHI NI MARI A, 1 4 8 1 5 9 6 POSTGRADUATE DI PLOMA I N BUSI NESS APMG 8 1 1 9 : DI GI TAL ENTERPRI SE 2 0 1 7 > > APMG 8119: DIGITAL ENTERPRISE
Background of Pushpay Found in 2011 Listed on NSX & ASX High-tech firm Provide third party payment/engagement/community solutions Easy, Fast, Simple: in 10 seconds Markets: Faith sector, schools, charities, S&M enterprises Functional features: Cash and Check Recording, Autopay, Text Giving (enable donors to pay via text message link), Annual Giving Statements, Echurch Apps > > APMG 8119: DIGITAL ENTERPRISE
Background of Pushpay 2017 Performance Highlights key metric FY 2017 (US$) FY 2016 (US$) Change Increase in Annualised Committed $30.9m $15.6m +97.9% Monthly Revenue (ACMR) over the year ACMR $50.5m $19.6m +157.7% Total Customers 6,737 3,766 +78.9% Average Revenue Per Customer $625/M $434/M +44.1% (ARPC) Staff Headcount 376 215 +74.9% Published App rank in the Apple 5 13 +61.5% App Store worldwide Transactions processed over the 6.1m 1.9m +220.1% year Annualised Monthly Payment $1.8b $0.6b +193.1% > > APMG 8119: DIGITAL ENTERPRISE Transaction Volume
Market Position The Pushpay Market Position in the US Faith Sector Market Size TOP 20 largest Top 100 largest Pushpay Customers 10 42 > > APMG 8119: DIGITAL ENTERPRISE
Future Plan Short term plan - the company Market Churches Public schools Private schools Not-For focuses on increasing its markets Profit Market >340k >98k >3k >1.6 million share in the US faith sector in width size and depth. Long term - the company is to develop and grow market shares in three additional target areas, together with churches. The customer numbers are displayed in the table, with a total market potential of $5.5 billion. > > APMG 8119: DIGITAL ENTERPRISE
Revenue Analysis Revenue Creation 1. Subscription Fee Individual users 2. Processing Fee payment through Pushpay. 3. Grant from government 4. Interest Pushpay transact the Pushpay also provides money to churches, engagement solutions for schools, charities and organizations for online S&M companies. community establish. > > APMG 8119: DIGITAL ENTERPRISE
Revenue Analysis Why is this revenue created? Pushpay delivers business value through their services which meets customer needs initiated by e-commerce and mobile device development. Communication with Online APPs is replacing physical interactions. 70% Higher demand on convenience and New Zealanders own a smartphone by 2015 simplification of nearly all aspects of daily life. > > APMG 8119: DIGITAL ENTERPRISE
Revenue Analysis Revenue estimation 2017 June 2018 March Annual Committed 62.6 100 Monthly Revenue (In Million US dollar) Key drivers for revenue growth: • Monthly payment increasing due to cohort growth with the enlarged customer size. • Customer number growth based on the optimistic market potential, in terms of the huge amount of churches, schools and Not-For-Profit organizations. • New market development in faith sector. > > APMG 8119: DIGITAL ENTERPRISE
Revenue Analysis Risk and Opportunities Major risks of revenue Major opportunities of component revenue component Trust and satisfaction are the core of an Further revenue opportunities of online transaction platform like Pushpay, Pushpay is generated by its competitive which is highly related to customer advantages as follows. experience when using APP or website. • Completeness of solutions providing • External risks: substitute product with both payment and engagement. would emerge along with the • Mature network and recourses within widespread utilization of social media. the industry, such as social network (WeChat as an example) with top churches. • Internal risks: system stability and • Cooperation with other companies optimization. by customer resource sharing to enlarge Pushpay market share. > > APMG 8119: DIGITAL ENTERPRISE
Cost Component Analysis • Technology • Transactional fee and platform payment to third party maintenance • Online process cost • Online process costs Product development Third party and direct cost maintenance cost General and Sales and other marketing administration • External cost • Professional advertising cost, cost service fees, promotional events, occupancy brand building and costs, stock corporate exchange listing communications. expenses. • Offline Process cost • Offline process cost. > > APMG 8119: DIGITAL ENTERPRISE
Estimated Total Cost Costs 2017(US$000) 2016(US$000) Change Third party direct 14869 4580 225% cost Product 7821 3050 156% Development and Maintenance cost Sales and 19206 10044 91% Marketing cost General and other 15101 5865 157% Administrative cost Total Cost 56997 23539 > > APMG 8119: DIGITAL ENTERPRISE
Cost Analysis- Risk and Opportunities Risk Opportunity • Processing cost are expected • Focus on reducing third party to increase in the near future. direct cost by forming good ties with financial institutions. • The fast changing development in technology • Reducing client success fees by may lead to higher focusing on cloud-based technology investment. solutions. • Increasing R&D efficiency by obtaining grant and social sharing. • The strategic alliance with intuit- the accounting software firm. > > APMG 8119: DIGITAL ENTERPRISE
Value Propositions Simplicity Community Mobile E nhancement Value Propositions Transparency through Efficiency engagement Empower Security -ment > > APMG 8119: DIGITAL ENTERPRISE
The Value Creation Process S&M Church School Charity Companies Engagement Pushpay Participation Engagement 3rd Party Developer Social Community Donor/Payer Payment Payment Payment > > APMG 8119: DIGITAL ENTERPRISE
The Pushpay Business Model Status Content Products info for church, charity and school are very brief Details and demo has to be requested by customers Simple and efficient payment solutions through mobile app., web and text. Customer Provides engagement and community tools Experience for churches, donors, and among them. Datacenter-hosted platforms to support payments through mobile, text, website & 3 rd party APIs. Platform But valid only in USA, AU, NZ and CA Debit card, and credit card of VISA, MasterCard, American Express and Discover only. > > APMG 8119: DIGITAL ENTERPRISE
An External Perspective Dimensions Church School Charity S&M Businesses Note Loyalty High High Low Low Extent of shared interest Size Small High Medium High Group size Wealth High Medium Low Medium-Low Purchasing power Competition Low High Low High Competing offerings Revenue Church School Charity S&M Businesses Model Business Pay Volume-based Mixed of Free Free& Model Bias Pay + Pay Volume-based Pay Note Pay to Small Unite Access fee Advertising Fee and/or Small Access Access Fee > > APMG 8119: DIGITAL ENTERPRISE
An Internal Perspective Value Proposition Indicators Pay Free Mix Compelling Content Coverage Distribution control Choice Context Convenience Connectivity Community Comment Customization Conversation Collaboration Citizenship Customer experience Application Consumer review and compensation > > APMG 8119: DIGITAL ENTERPRISE Source: KPMG,2009
The Business Model Matrix Revenue Pay Supportive Free Supportive Mix Supportive Model Initiatives Initiatives Initiatives Bias Churches Strengthen distribution control for Pay School client commitment Church School Schools Volume- Strengthen distribution control for Create features of community, connectivity Enhance customer based pay client commitment and collaboration between schools; expose review and school products online for easier identification compensation Charities Mixed of Strengthen client control, as well as Create features of community, connectivity Enhance customer free+pay more functional applications and collaboration between Charities. review and compensation S&M Create features of community, connectivity, Enhance customer Free& Enterprises collaboration between schools; increase review and Volume- products exposure, as well as product compensation based Pay citizenship impacts for clients Launch distinctive features and more functionality. Charity > > APMG 8119: DIGITAL ENTERPRISE S&M
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