Pie Funds chief executive Mike Taylor says Pushpay's growth potential convinced his firm to take a stake in the software developer through participating in its $18.7 million capital raising, announced yesterday.

Pushpay will raise the cash through issuing new shares at $4.88 each - an 18.7 per cent discount to the stock's $6 opening price yesterday - to a number of existing and new investors through a private placement.

Chief executive Chris Heaslip said the capital raising would provide funding for product development and working capital required to speed up growth in international markets, particularly the United States.

Pushpay, founded by Heaslip and Eliot Crowther in 2011, has developed a smartphone app targeted largely at US churches for gathering donations.

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"There's over 300,000 churches with more than 500 people in the US," said Taylor, whose North Shore-based boutique investment company has about $250 million under management. "They've currently got around 2000 churches signed up so there's significant room for growth. They are the only serious contender, at the moment, in that market."

Last month, Pushpay said it had grown its merchant annualised committed monthly revenue from $1 million to $10 million in less than 10 months.

The company reported a $7.5 million loss for its last financial year.

Taylor declined to disclose how much Pie Funds had invested in the private placement, but said it was a "material" amount.

Existing shareholders who took part in the placement included interests associated with Pushpay directors Bruce Gordon, Graham Shaw, Christopher Huljich and alternate director Peter Huljich. They have all agreed to a two-year embargo.

The Bhatnagar family, which owns about 5.4 per cent of Pushpay, contributed $2.4 million to the placement through various family entities.

Pushpay shares, which closed at $6 last night, have gained 500 per cent since listing at $1 a share in August 2014.

The new shares issued in the placement will be quoted on the NZX next Monday, October 5.