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.

Biden’s Cozy Relations With Bank Industry

 Eric Umansky /ProPublica

ProPublica published this in 2008, shortly after Obama chose Biden as his running mate

Sen. Joe Biden, the U.S. Democratic vice-presidential candidate. (Credit: Emmanuel Dunand/AFP/Getty Images)

With Sen. Joe Biden joining the Democratic ticket, there’s renewed scrutiny of Biden’s connections to the credit card industry. Biden has been particularly cozy with MBNA, a financial services company from Delaware, and now a subsidiary of Bank of America.

Over the past 20 years, MBNA has been Biden’s single largest contributor. And as the New York Times and Wall Street Journalnote, Biden’s son Hunter was hired out of law school by MBNA and later worked as a lobbyist for the company.

The Times also details just how helpful Biden has been to MBNA and the credit card industry. The senator was a key supporter of an industry-favorite bill — the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” — that actually made it harder for consumers to get protection under bankruptcy.

As the Times notes, Biden was one of the first Democratic supporters of the bill and voted for it four times until it finally passed in March 2005. A spokesman for Sen. Obama told the Times, “Senator Biden took on entrenched interests and succeeded in improving the bill for low-income workers, women and children.”

Yet the Times actually looked at the legislative record and paints a different picture:

[Biden] was one of five Democrats in March 2005 who voted against a proposal to require credit card companies to provide more effective warnings to consumers about the consequences of paying only the minimum amount due each month. Mr. Obama voted for it.

Mr. Biden also went against Mr. Obama to help defeat amendments aimed at strengthening protections for people forced into bankruptcy who have large medical debts or are in the military; Mr. Biden argued that the amendments were unnecessary because the legislation already carved out exemptions for those debtors. And he was one of four Democrats who sided with Republicans to defeat an effort, supported by Mr. Obama, to shift responsibility in certain cases from debtors to the predatory lenders who helped push them into bankruptcy.

The Washington Post‘s David Broder detailed other industry-friendly aspects of the bill back in 2005. One proposed amendment to the bill would have stopped corporations from “judge-shopping” and going to the most-friendly venues for their bankruptcy cases. The amendment was introduced by Republican Sen. John Cornyn of Texas and appeared to have wide bipartisan support. But it never passed. Broder writes that Biden helped kill it.

Get the latest news from ProPublica every afternoon.

Elliott Management Supportive of SAP Initiatives Comprehensive Review and Operational Targets will Drive Significant Value

NEW YORK–(BUSINESS WIRE)–Elliott Management Corporation (“Elliott”), which manages funds that collectively own €1.2 billion in common stock and economic equivalents of SAP SE (the “Company” or “SAP”), today released a statement supporting SAP’s initiation of a comprehensive review, formation of a Special Executive Board Committee and implementation of new, multi-year operational targets. In the statement, Elliott Partner Jesse Cohn and Portfolio Manager Jason Genrich also praised CEO Bill McDermott and CFO Luka Mucic on the Company’s commitment to these initiatives:

“Elliott is highly supportive of the initiatives announced today, and we commend CEO Bill McDermott, CFO Luka Mucic and the entire SAP team for taking these steps. SAP is one of the great technology franchises in the world and one of the only scale software businesses with growing on-premise revenue alongside 30%+ growth in cloud revenue. The Company’s stock has been consistently undervalued relative to its revenue growth, and today’s announcement lays the groundwork for substantial value realization.

“With SAP’s key strategic acquisitions in place and a multi-year S4/HANA product cycle ahead, now is the time for focused execution on these operational opportunities. SAP has set the right targets with a 75% cloud gross margin and 500 basis points of operating margin improvement. These targets balance continued revenue growth and accelerating profitability. The operational review and Special Executive Board Committee should ensure that these targets are achieved, and we look forward to hearing further details and a specific timeline at the Special Capital Markets Day later this year. We believe SAP’s management team can drive toward a highly successful result.

“The combination of SAP’s growth profile, operational targets and forthcoming share repurchase analysis can generate tremendous earnings growth over the next several years. Elliott sees the potential for the Company to achieve earnings per share of €8.50 in 2023. This level of earnings growth can yield substantial returns to shareholders and realize a value-creation opportunity that is rarely available at SAP’s scale.”

About Elliott

Elliott Management Corporation manages two multi-strategy funds which combined have approximately $34 billion of assets under management. Its flagship fund, Elliott Associates, L.P., was founded in 1977, making it one of the oldest funds of its kind under continuous management. The Elliott funds’ investors include pension plans, sovereign wealth funds, endowments, foundations, funds-of-funds, high net worth individuals and families, and employees of the firm.


Elliott intends to review its investments in the Company on a continuing basis and depending upon various factors, including without limitation, the Company’s financial position and strategic direction, the outcome of any discussions with the Company, overall market conditions, other investment opportunities available to Elliott, and the availability of Company securities at prices that would make the purchase or sale of Company securities desirable, Elliott may at any point in time (in the open market or in private transactions, including in the short term and since the inception of Elliott’s position) buy, sell, cover, hedge or otherwise change the form or substance of any of its investments (including any or all Company securities or related financial instruments) to any degree in any manner permitted by law and expressly disclaims any obligation to notify others of any such changes. Elliott also reserves its right to take any actions with respect to its investments in the Company as it may deem appropriate.

EY 2019 EOTY Philly Finalists

EY Press Release

Meet the 2019 finalists

Congratulations to the finalists in the Entrepreneur Of The Year® 2019 Greater Philadelphia program!

Alkemy X, Inc. | Justin Wineburgh

Aqua America | Christopher Franklin

Broder Bros., Co. | Norman Hullinger

Catalyst Outdoor | Thaddeus Bartkowski

City Center Investment Corporation | J.B. Reilly

Education Management Solutions, LLC | Anurag Singh

Education Management Solutions, LLC | Sharada Singh

ELAP Services | Steve Kelly

Freedom Mortgage Corporation | Stanley Middleman

Gen3 Marketing, LLC | Andy Cantoss

Gen3 Marketing, LLC | Mike Tabasso

GLOBO Language Solutions, LC | Gene Shriver

Good Life Companies | Conor Delaney

Good Life Companies | Courtnie Nein

Guru Technologies, Inc. | Rick Nucci

Houwzer | Mike Maher

Lisi Lerch, Inc. | Lisi Lerch

Medical Guardian | Geoff Gross

Molecular Targeting Technologies, Inc. | Chris Pak

Morgan Properties | Jonathan Morgan

Netronix, Inc | Vasileios Nasis

NeuroFlow | Christopher Molaro

NextGen Security LLC | Frank Brewer

OPS Security Group | Daniel Costa

PJP | Thomas Furia Jr.

Positive Physicians Insurance Exchange | Dr. Lewis Sharps

Perfection Snacks™ | Amy Holyk

Revel Nail, LLC | Keeli Malone

Revel Nail, LLC | Phon Malone

Revel Nail, LLC | Monica Sutton

Revel Nail, LLC | Reed Sutton

Revolutionary Security LLC | Richard Mahler

SEAT, LP | Douglas Berry

Sidecar Interactive, Inc. | Andre Golsorkhi

Solvix Solutions LLC | Stacey Rock

STP Investment Services | Patrick Murray

TRIOSE Inc. | C.J. Joyner

TRIOSE Inc. | Ira Tauber

Union Packaging, LLC. | Michael Pearson

USSC | Joseph Mirabile

Velicept Therapeutics | James Walker

VenatoRx Pharmaceuticals, Inc. | Chris Burns

VenatoRx Pharmaceuticals, Inc. | Dan Pevear

VenatoRx Pharmaceuticals, Inc. | Luigi Xerri

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.