#041: Software for Churches Is A BIG BUSINESS, What It Takes To Raise In 2023, Public SaaS Co Slow/Fast Growers

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Oct 09, 2023

Software For Churches Is A Big Business

n 2012 this guy walked into a Starbucks to order a latte & thought,

"If I can use my smartphone to order coffee, why can’t I use it to give to my church?"

Fast forward a decade & he's built a big-time church software business.

From Pastor to Tech CEO, here's the story:

Tithe(.)ly is a software solution that powers 30,000+ churches across the United States. They offer a suite of software that helps churches increase generosity, manage their operations, and engage their members. But like any business, it's been quite the roller coaster...

Dean Sweetman, a tech-forward Pastor, came up with the idea for Tithe(.)ly when the iPhone had just come out. He started to realize how mobile devices could solve SO MANY problems for his church. He stepped away from ministry and went all in. From Pastor to Tech CEO...

Dean’s son, Barnabas, who was also a pastor, developed the first version of Tithe(.)ly in just 6 months. Dean launched the first version of the mobile app to the church he pastored in Atlanta. Their wedge product? Using a mobile app to digitize church donations.

Dean brought in Frank Barry who was cut his teeth at another vertical SaaS company, Blackbaud. Dean was a Director of Business Development there and joined as COO. He had the perfect background, having seen Blackbaud grow into a market-leading vSaaS for non-profits.

A key part in scaling was giving away their software for free, and monetizing on payments transactions. A popular strategy in vertical SaaS, and this was PERFECT for the church space. It led to the business signing up A LOT of churches & fast...

Tithe(.)ly listened to their customers and expanded beyond church donations. The offer a whole host of products now, including: Church Management Custom Church Apps Communication Tools Event Management Church Websites

Like all start-ups, they had their fair share of ups and downs. When COVID hit, the company's revenue grounded to a halt. The team rallied, helping churches offer services online. Demand skyrocketed. They went from signing up ~600 churches a month to 1K+ PER DAY.

The business has also been incredibly efficient. Public listings suggest they've only raised $20M in venture capital. $15M of which came in 2019. BUT, they have ~200 employees. I would estimate they are probably VERY PROFITABLE and in the ~$50M ARR range.

There are ~350K churches in the U.S. which means Tithe(.)ly is at ~10% market penetration vSaaS businesses can typically get to ~25% before growth starts to slow. BUT, there are 2.3 BILLION Christians in the world, which likely means there is still a lot of room for growth.

Who would have though a trip to Starbucks would change the course of Dean and Barnabas's life. Kudos to the team. It's been fun to watch.

One ‘How To’:

How To Raise Money in 2023

Christoph Janz puts out the “SaaS Napkin” every year which gives you a rough framework of what you have to achieve to raise capital. I highly recommend it every year! Bit of an eye sore, so feel free to go deeper here.

One Vertical SaaS Breakdown:

Fastest & Slowest Publicly Traded Software Companies

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