New Zealand Professional Investment Services Firm

Forsyth Barr

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Pushpay (PPH) Tithe.ly acquires US Church Management System Breeze</h2>
Pushpay (PPH) competitor Tithe.ly has announced the acquisition of US church management system (ChMS) Breeze. Breeze would have been an obvious target for PPH to acquire given its 9,000 church customer base in the small-medium size space. The acquisition is a clear indication of the increasing competitive pressures for PPH, with Tithe.ly intent on adding to its ~30,000 church customer base across 50 countries.
Impact for PPH
This is fairly significant for PPH as it 1) effectively reduces its serviceable obtainable market (SOM), with Tithe.ly likely to cross-sell Breeze's existing customers into the Tithe.ly giving platform, 2) which also may see a slight uptick in churn for PPH given a number of Breeze customers are likely to be PPH customers, 3) cements Tithe.ly's position as the leading provider in the small-medium size church customer space (an area PPH has recently looked to grow its share) and 4) supports our view that the US church technology market will continue to consolidate further, making further acquisitions for PPH harder and more competitive.
Acquisition details
The transaction fee is undisclosed, but the acquisition increases Tithe.ly customers from ~30,000 to ~40,000 and employees from 150 to 200. We believe the two companies are culturally a good fit, given that they were both founded by pastors. For Tithe.ly, this transaction enhances its bundled solution, with Tithe.ly already providing Giving, Donor reconciliation, Media, apps and people among other features and Breeze providing a robust Church Management System. We view the acquisition as a sign of intent from Tithe.ly – with a view to continue its substantial recent growth into the post-COVID recovery period.
What we know about Breeze&nbsp;<a href="https://www.breezechms.com/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.breezechms.com/&amp;source=gmail&amp;ust=1631666645624000&amp;usg=AFQjCNExUyYsZPm9fsMkiNlg_3MCE0GsLQ" rel="noopener">link</a>
<ul>
<li>Breeze is a ChMS with ~9,000 customers at the 200-600 sized bucket, predominantly in the US and Canada.</li>
<li>It was founded by CEO Jon VerLee (a former pastor) in 2013</li>
<li>Pricing is US$50/month subscription fee</li>
<li>Online estimates suggest Breeze’s revenue to be US$4-5m which we view as a reasonable assumption given the pricing plan and number of customers (US$50*12months*9,000 churches is around US$5.4m in annual revenue)</li>
<li>It has 50 FTEs, implying revenue per employee to be ~US$110k (vs PPH at US$440k at FY21, US$280k at FY20)</li>
</ul>
Integrations&nbsp;-&nbsp;<a href="https://www.getapp.com/nonprofit-software/a/breeze/integrations/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.getapp.com/nonprofit-software/a/breeze/integrations/&amp;source=gmail&amp;ust=1631666645624000&amp;usg=AFQjCNGlp06gwzewI7fNpo_imYom1r3Dgw" rel="noopener">link</a>
<ul>
<li>Pushpay</li>
<li>Mailchimp (email and advertising marketing automation platform)</li>
<li>Stripe (online payment processing)</li>
<li>Quickbooks (Small business accounting software)</li>
<li>Hubstaff (Time tracking for remote teams)</li>
<li>Tithe.ly</li>
<li>Kindrid, easyTithe, and Continue to Give (all mobile giving and donor engagement platforms)</li>
<li>IDoneThis (task management tool)</li>
<li>Authorise.Net (Credit card processing for SME merchants)</li>
<li>KidCheck (easy-to-use children’s check-in)</li>
</ul>
Reviews
Online reviews for Breeze are generally positive, typical comments are that customers are drawn to the price and ease of use, but would want more features. We note Breeze’s 4.86 total rating on Softwareadvice.com (432 reviews) vs 4.74 for Tithe.ly (179 reviews) and 4.41 for PPH (149 reviews).
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/595/original/image_53597762531631580547032.png?1631580548" class="editor-image img-responsive" data-smartkarma-image-id="229595"></figure>
Breeze features:
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/229/596/original/image_3770308241631580574184.png?1631580573" class="editor-image img-responsive" data-smartkarma-image-id="229596"></figure>

Pushpay (PPH) Tithe.ly acquires US Church Management System Breeze
Pushpay (PPH) competitor Tithe.ly has announced the acquisition of US church management system (ChMS) Breeze. Breeze would have been an obvious target for PPH to acquire given its 9,000 church customer base in the small-medium size space. The acquisition is a clear indication of the increasing competitive pressures for PPH, with Tithe.ly intent on adding to its ~30,000 church customer base across 50 countries.
Impact for PPH
This is fairly significant for PPH as it 1) effectively reduces its serviceable obtainable market (SOM), with Tithe.ly likely to cross-sell Breeze's existing customers into the Tithe.ly giving platform, 2) which also may see a slight uptick in churn for PPH given a number of Breeze customers are likely to be PPH customers, 3) cements Tithe.ly's position as the leading provider in the small-medium size church customer space (an area PPH has recently looked to grow its share) and 4) supports our view that the US church technology market will continue to consolidate further, making further acquisitions for PPH harder and more competitive.
Acquisition details
The transaction fee is undisclosed, but the acquisition increases Tithe.ly customers from ~30,000 to ~40,000 and employees from 150 to 200. We believe the two companies are culturally a good fit, given that they were both founded by pastors. For Tithe.ly, this transaction enhances its bundled solution, with Tithe.ly already providing Giving, Donor reconciliation, Media, apps and people among other features and Breeze providing a robust Church Management System. We view the acquisition as a sign of intent from Tithe.ly – with a view to continue its substantial recent growth into the post-COVID recovery period.
What we know about Breeze&nbsp;link

Breeze is a ChMS with ~9,000 customers at the 200-600 sized bucket, predominantly in the US and Canada.
It was founded by CEO Jon VerLee (a former pastor) in 2013
Pricing is US$50/month subscription fee
Online estimates suggest Breeze’s revenue to be US$4-5m which we view as a reasonable assumption given the pricing plan and number of customers (US$50*12months*9,000 churches is around US$5.4m in annual revenue)
It has 50 FTEs, implying revenue per employee to be ~US$110k (vs PPH at US$440k at FY21, US$280k at FY20)

Integrations&nbsp;-&nbsp;link

Pushpay
Mailchimp (email and advertising marketing automation platform)
Stripe (online payment processing)
Quickbooks (Small business accounting software)
Hubstaff (Time tracking for remote teams)
Tithe.ly
Kindrid, easyTithe, and Continue to Give (all mobile giving and donor engagement platforms)
IDoneThis (task management tool)
Authorise.Net (Credit card processing for SME merchants)
KidCheck (easy-to-use children’s check-in)

Reviews
Online reviews for Breeze are generally positive, typical comments are that customers are drawn to the price and ease of use, but would want more features. We note Breeze’s 4.86 total rating on Softwareadvice.com (432 reviews) vs 4.74 for Tithe.ly (179 reviews) and 4.41 for PPH (149 reviews).

Breeze features:


PPH Competitor Update: Tithe.ly Acquires Breeze

Pushpay Holdings

PPH Competitor Update: Tithe.ly Acquires Breeze