The greatest journey of my life

Last Friday, I concluded the greatest journey of my life - my investment journey in Pushpay. Over the course of last week, I exited the last of my stake with the share price at record highs, on the back of a superb annual result. 

Our family invested in Pushpay in March 2014, not long after Peter and Chris Huljich made their first investment in late 2013. I recall meeting Chris Heaslip and Elliot Crowther at their Glenfield offices in February 2014 - threadbare carpets, lack of space and tired surrounds, and found myself instantly liking them and their pitch. They had clarity about the problem they solved, and size and scope of the opportunity ahead of them. 

Our family made our first investment shortly after that meeting, and followed up with heavy participation in subsequent raises, becoming Pushpay’s biggest non-insider investor.

One of the highly successful "Summit" conferences, where Pushpay brought together thought leadership for modern churches (2018)

I’ve been lucky to have some other great investment winners, but it’s also true all my other notable winners wouldn’t add up to anywhere close to Pushpay. For me, there’s been Pushpay, and then there’s been everything else. It even dwarfed the greatest success of my father, Sir Roger Bhatnagar, with his success in electronics retail  with Noel Leeming/Pacific Retail.

It’s time to thank a number of people who have been involved in this journey. Firstly to my wife Mara, my brother-in-law Blair and my sister Anita, and our respective families, who have had to put up with husbands and fathers travelling regularly to the United States for research.

Secondly, I want to thank and salute the hard work and vision of Peter Huljich, Bruce Gordon, Chris Heaslip, and Eliot Crowther. I especially want to note Peter Huljich’s vision and determination, Clearly everything he learnt from his involvement with tech stories like Diligent Corporation, his Kiwisaver fund, and his other business experiences, has culminated in building a company now worth nearly $1.8 billion NZD.

I’d also like to thank the hard work and dedication of Pushpay staff over the years. There are too many to mention all here, but I want to mention current and former staff like Shane Samson, Josh Robb, Troy Pollock, Matt Tressider, Paul Shingles, and Kruger Schaumkel.

So what are the great lessons of Pushpay, as I saw them?

• Hire slow and fire fast. Don’t accept weak performers. It is better to have an incomplete team than one where roles are filled with sub-optimally skilled people or someone who isn't the right fit.
• In a SaaS business, client success is as important as sales. When you have a retention rate above 95%, you have a product that people love and rely on. Put emphasis on your onboarding process and check in with new customers to make sure they are happy and using your software fully.
• Investing for growth is not just about sales and dev teams. Diligent Corporation got badly sidetracked when they had to restate several years of revenue due to using spreadsheets instead of proper SaaS accounting software. Pushpay never made that mistake, and I’ll take a hat tip for thumping the table at capital raise briefings about how money had to be set aside for the right tools and building proper systems and processes.
• There comes a time when buying revenue growth must make way for organic and profitable growth. Many market watchers were disappointed by Pushpay’s slowing revenue growth in 2018. It turns out they had a plan to become very profitable and not require any more capital. No-one knew that Covid-19 would come along and devastate economies and markets, but Pushpay had the luxury of telling the world that they didn’t need money (and in fact, were well positioned).
• A narrow niche is great as long as it’s deep. The faith sector had a Win95 experience when the rest of the world were using smartphones for e-commerce. With over 300,000 churches in the USA, Pushpay’s narrow but deep focus was delivering best of class apps for Christians.
• Pushpay raised significant money in all their capital raises. Consequently, Pushpay stood a great chance of reaching their targets because they had plenty of runway and the ability to test and trial along the way.
• Pushpay solved problems. They understood the pain points pastors and parishioners had in their Church. They sought to solve issues and make engagement easier, and turn cynics into product champions. 
• People sell their shares for many reasons - they get divorced, buy homes, are spooked by politics, whatever. Yet the number of times I saw comments attributing some byzantine reason like “fears over the US economy” or “XYZ is starting a crypto currency” as impacts on the Pushpay share price was comical.
• There was no shortage of ill informed people saying something like “why can’t people just use eftpos or internet banking”, or "Facebook payments will kill you", proving that even a little research and imagination is beyond most people.

It's also been a real pleasure to see a number of people I know do well from this incredible journey. People have had holidays paid for, deposits on homes made, mortgages wiped out and financial security confirmed thanks to the faith they had in this investment in the early days. Around 400 jobs have been created. The New Zealand software coder community has been significantly enhanced, and Pushpay alumni are now involved in exciting new ventures. NZ's capital markets have been deepened and made more sophisticated. It's truly heart-warming to see how Pushpay has changed lives.

Anyway, enough from me - this post has been cathartic and hopefully just a little bit helpful to those seeking the next great tech investment. Now, I get to go out and find another great story to back, and also give back to some philanthropic causes. Let a new journey begin! 

Peter Huljich, director of Pushpay, early and significant investor in the company

Bruce Gordon, inaugural Chairman and current CEO of Pushpay

Some fun by the graphic designers - Founders Chris and Eliot as F1 legends James Hunt and Niki Lauda - reinforcing the growth message (circa 2016)

Pushpay won many awards for customer service. Here is a coveted "Stevie" award from 2016.

When NZ investor groups came over to Seattle for research, we made a point of bringing a lot of NZ confectionary, not just for homesick Kiwis, but also to bring the joy of Pineapple Lumps and Whittakers to Americans.

With Troy Pollock, pointing out a banner emphasising growth in Platform Volume - a source of humour for him and I.

Matt Tressider leading the staff during a Friday afternoon stand up.

---