Top Philly startup InstaMed acquired by JP Morgan

Tom Paine

Philly-based InstaMed, which announced in February that it was selling itself, found its buyer last week: JP Morgan. PE Hub said the price was between $550 and $600 million. Company officials indicated last Fall that they expected 2018 revenue to be in the neighborhood of $58 million. So its basically 10x revenue.

InstaMed, which is a dedicated health payments platform for consumers, had raised $132.4 million going back to 2005, according to CrunchBase. Local investors included Osage Venture Partners, Ben Franklin, NJTC, and believe it or not Josh Kopelman from his personal fund. Instamed is heavy in Penn connections.

InstaMed processed $94 billion of transactions last year, the companies said. Within the $3.5 billion annual healthcare spend, consumers are paying an increasing share of it directly.

InstaMed’s target market has largely been self-insured, under-insured, and other consumers facing high deductibles.

Management stayed focused on building a reliable platform for accumulating volume in healthcare payments. Not too many bells and whistles.

“We’ve made significant investments in our wholesale payments business over the years and this acquisition will give us a unique advantage in one of the fastest growing sectors,” Takis Georgakopoulos, global head of the bank’s wholesale payments, said in a statement.

But beyond the accumulation of volume in payments, I think JPMorgan would do well to develop a deeper industry-specific healthcare strategy for InstaMed. This could include more information that help consumers see more options, understand tradofffs and better evaluate cost alternatives in choosing services.

This effort appears totally separate from Haven (a joint venture between JPMorgan, Amazon and Berkshire Hathaway that was announced in 2018), though that could always change.

Bill Marvin, co-founder and CEO of InstaMed, will continue in the same role under JPMorgan.

InstaMed’s 300 employees will continue to be housed at Philly headquarters and its Newport Beach CA cloud center.

InterDigital says it can still license 5g Tech to Huawei

Tom Paine

Wilmington-based InterDigital says it believes it can still license advanced 5g technology to China telecom giant Huawei, despite the Trump administration’s attempt to cut off technology sales to the company.

InterDigital (NASDAQ:IDCC) says export control laws do not cover patents, which are public records and therefore not confidential technology.

Huawei accounted for 14% of InterDigital’s $533 million in revenue in 2017.

First Round’s tally on Uber is in

Tom Paine

The Wall Street Journal published an article this week highlighting some of the biggest VC investment wins of recent time, choosing First Round Capital’s stake in Uber as a prime example.

The numbers it has for that are $500,000 invested in 2010, returning proceeds of $2.5 billion, or 5,000x its investment. I saw some slightly different figures in other publications.

Of course, these results came from the WSJ, not First Round. And I’m not sure they recognized that about 40% of First Round shares were sold last year as part of the Softbank offer, according to sources.

Planning for the capital gains on that profit must have been a bear.

Zayo to be acquired by two investors

Zayo Group Holdings, Inc., after an extensive review period, agreed to be acquired by PE firms Digital Colony and EQT, for $14.3 billion including $5.9 billion of net debt, in a deal announced Wednesday.

Zayo, under pressure, said in March it was looking at strategic options.

Boulder, Colo.-based Zayo operates a 131,000-mile fiber network in the U.S., Canada and Europe that connects to thousands of buildings and data centers.

Zayo has a strong east coast network and a data center at 401 N Broad St. It had been subject to periodic speculation in the past that Comcast might be interested in acquiring it.

But Zayo might find its ultimate purpose as an acquisition by someone building out 5g.

Philly Enterprisetech Recent Highlights

PE-backed Avantor (Radnor) preps $3B IPO | PitchBook via @PitchBook— Tom Paine (@phillytechnews) May 7, 2019

Business starter Ben Franklin says state funding shortfall puts Pennsylvania growth at risk— Allentown Morning Call May 4, 2019

Once-hot new media company Vice had been looking to raise additional capital amid stalling growth via @WSJ— Tom Paine (@phillytechnews) May 4, 2019

Local journalism is a civic need. We’ve raised more than $20 million to support @PhillyInquirer and other local outlets.

“There is no reason why other communities can’t follow suit,” @JimFriedlich said. “Indeed, they are.”— Lenfest Institute (@lenfestinst) May 4, 2019

I had thought RedBird Capital, minority investor in Sinclair’s buyout of
Fox Regional Sports, was a play on the Cardinals given it had been heavily involved in some St.Louis deals.
Actually, its named for founder Gerry Cardinale, a Main Line native— Tom Paine (@phillytechnews) May 4, 2019

Sungard Availability Services Capital filed for bankruptcy with a plan in place to cut its $1.3 billion debt load and hand control to a group of hedge funds via @markets
— Tom Paine (@phillytechnews) May 3, 2019

T-Mobile CEO (kind of) changes his tune about Comcast’s wireless service via @PHLBizJournal— Tom Paine (@phillytechnews) May 3, 2019

Sinclair to acquire sports networks from Disney in deal worth more than $10 billion via @WSJ— Tom Paine (@phillytechnews) May 3, 2019

Learn which types of #B2B content marketers are focusing on in the year ahead, via @MarketingProfs:— Marketo (@marketo) May 4, 2019

A look at Dara Khosrowshahi’s tenure as Uber prepares to go public; source: CEO decided Travis Kalanick isn’t welcome on the NYSE balcony for next week’s IPO (Mike Isaac/New York Times) #mustreadblogs #feedly— Tom Paine (@phillytechnews) May 3, 2019

KISSmetrics’ decline, Philly’s supply chain queen, Elliot Management’s headlock on SAP

I love good, critical self-analyses, and Hiten Shah’s probing of mistakes he may have made as co-founder of KISSmetrics is a good read.

Lora Cecere heads up Philly-based consultancy Supply Chain Insights , and is among the most knowledgeable analysts in the industry.

Here she writes about who will win the race for NextGen supply chain systems on Diginomics.

Also on Diginomica, Den Howlett and Brian Somer give us the low down on Paul Singer’s (Elliot Management) billion dollar stake in SAP, and don’t roundly condemn it, suggesting a little more vision and focus is needed there.

Chet Kanojia’s latest startup, Boston-based Starry, has filed to raise up to $125 million, according to a filing found by Pitchbook. The startup had already raised $160 million.

You might remember Kanojia’s prior startup, Aereo, which simply tried to give consumers what in effect was free streaming OTA access, only to be struck down by no less authority than the Supreme Court. Taking on the cable industry is difficult.

The newest startup offers wireless internet connectivity by relying on high-rise-mounted transmitters that dispatch millimeter wavelength signals to receivers connected to a building’s existing wiring.