Conshy-based Wirecard NA, declaring itself a free agent from German parent that lost $2 billion it never had, seeks acquirer

Tom Paine

Wirecard North America, a subsidiary of the ill-fated German company of the same name, says its for sale, free and clearnof any obstacles related to the parent company’s insolvency. I admit I don’t know German bankruptcy law, but in the US creditors would be putting in claims for every penny of identifiable assets. So its not quite clear how it can put itself up for sale so quickly.

Wirecard North America was formerly Citi Prepaid, and before that Ecount, a famed Conshohocken startup.

Wirecard acquired Citi Prepaid in 2016.

 On Monday, a Munich court appointed a preliminary administrator for the parent company after it filed for insolvency last week. The company admitted $2.1 billion was missing and probable never existed.

Wirecard’s German employees have not been paid for June, according to reports.

Seth Brennan, Managing Director of Wirecard North America, said in a statement: “Wirecard North America continues to operate without any disruption to clients and cardholders. The strong, independent cash flow and financial position of Wirecard North America allow us to operate the business on a completely standalone basis. Our valued customers and partners remain our top priority, while the dedicated North America team continues to ensure that there is no interruption in our day-to-day processes.”

Brinker Capital merges (or is acquired), Nerd St raises $10 million

Tom Paine

Two deals today worth knowing about:

Brinker Capital, the highly respected Berwyn-based investment management firm with $24.5 billion assets under management, announced today that is has merged with Omaha-based Orion Advisor Solutions.

Brinker is a practitioner of “behavioral finance,” a growing field which uses investor psychology to help guide investment strategy. Daniel Crosby, Ph.D., is Chief Behavioral officer.

The combined firm, which will carry the Brinker name, has $40 billion under management. Brinker is known as a TAMP, a Turnkey Asset Management Program, competing under the same model as Oaks-based SEI, but smaller. Among other things, Orion brings an excellent technology platform to the party.

Brinker Capital was reported to be for sale in a Barron’s article back in January . Brinker was said to be seeking more than $750 million. Early reports on Orion had said it was on the market seeking $1.875 billion. Terms of the agreement announced today were not revealed.

Existing Orion backer TA Associates was joined by new investor Genstar, who each took equal shares of the combined business.

Nerd Street Gamers raised #10 million from Comcast Spectacor, Five Below, Elevate Capital and SeventySix Capital. Nerd Street’s expansion plans for on-premise gaming sites were slowed by Covid-19, but it found more potential for its online offering and that’s where much of this round will go towards.

But Nerd Street is still looking to raise $25 million more this year to continue its geographical expansion plans, the Philadelphia Business Journal reported.

Philly EnterpriseTech Highlights June 25-28

Constellation Research’s BT 150 highlights business transformation leaders, including several from Philly

Tom Paine

Constellation Research, R “Ray” Wang’s leading Silicon Valley research and advisory firm to corporate technology users, publishes its Business Transformation 150 (BT150) once per year.

Constellation says the BT150 “is an elite list that recognizes the top global executives leading business transformation efforts in their organizations. Nominations from peers, industry influencers, technology vendors and analysts power the selection process each year.” 

One thing I like about the BT 150 is that its not an inward-looking list of Silicon Valley types.It covers a broad range of tech executives in a variety of industries across the nation and the globe..

Keep in mind that the list mostly covers CIOs who are responsible for technology users within an organization, as opposed to CTOs who developed customer facing products.

Jim Swanson – EVP and Group CIO
Johnson & Johnson

Claire Rutkowski – Chief Information Officer
Bentley Systems

Michele Norin – Sr. Vice President and Chief Information Officer
Rutgers University

Robert Neff – Vice President, Digital Solution Development Digital Innovation and Consumer Experience Group, Thomas Jefferson University and Jefferson Health  

Justin Mennen – Executive Vice President and Chief Information Officer RITE AID

Bill McCorey – SVP – Global CIO
Universal Parks and Resorts

John T Marcante – Chief Information Officer, Managing Director
Vanguard 

Steven John – CIO
ARA Aramark Uniform Company 

Matthew Ernst – Manager Information Systems
Thomas Jefferson University Hospitals

Chris Fielding – CIO
Sungard Availability Services

InstaMed, as part of JPMorgan Chase, faces new challenges and competitors

Tom Paine

By offering a better customer experience for healthcare payments, Philadelphia-based InstaMed created a new market and was acquired by JPMorgan Chase a year ago for a reported $500 million-plus.

But by no means is the market closed to competition. In fact, new investments are springing up all over the place. New York-based Cedar just scored a $102M series C funding round, led by Andreessen Horowitz, which has also been active in Philly lately. Cedar describes itself as having payment systems similar to InstaMed. I’ve found no information as to how much in payments Cedar is processing.

Also, Atlanta-based Patientco seems to be offering similar services. And San Francisco-based Alpha Heath just raised $29 million, led by Andreesson Horowitz again.

Total US healthcare expenditures are just under $4 trillion per year. Out of pocket consumer payments are about 10% of that, or $400 billion. That’s the primary market InstaMed serves. The market has grown faster than total expenditures, largely due to higher deductibles..

InstaMed is currently processing about $100 billion per year.

Some time before the JPMorgan acquisition, I had discussed with InstaMed management whether its product would become”smarter”, perhaps offering consumers more benefits and options.. I was told that InstaMed had operated to that point with a single objective of growing payment volume in a highly secure environment. That focus payed off. But I still think more intelligence could be built into its product.

Covid-19 has added complexities, but it could convert more consumers to online payments. InstaMed.now has just shy of 300 employees between Philadelphia and its Newport Beach data center according to LinkedIn (sometimes not a perfect indicator). It had 258 employees at the time of its acquisition.

JPMorgan is also part of joint venture Haven, along with Amazon and Berkshire Hathaway, that aims to revolutionize healthcare.

Philly EnterpriseTech PeopleNews 6/25/2020

Matt Wallach, the Delaware County native who “retired” from te Presidency of Veeva Systems, a company he cofounded, last year, has returned as planned at the beginning of the year to the Board of Veeva as a non-executive member. Wallach, who designed much of Veeva’s product/market fit, is also active in the community and is on board of Philly startup HealthVerity.

Philly EnterpriseTech Highlights June 21-24

Tom Spann’s Act II, Brightside, raises $35.1 million from Andreessen Horowitz (a16z) with participation from existing investors Comcast Ventures and Trinity Ventures http://bit.ly/30U3rzg

Upper Darby’s own

Accolade prices IPO

Tom Paine

Philly (Plymouth Meeting) & Seattle-based Accolade, which filed for an IPO back in February, announced its pricing this morning. The IPO’s timing was likely slowed down by Covid-19.

Accolade provides healthcare navigation assistance to client companies’ employees.. It combines the use of smart technology with human assistance. Comcast is its largest customer.

Accolade will price 8.75 million shares at between $19 and $21. raising $175 million at the midpoint and valuing the company at nearly $1 billion. Investors include Accretive at 26.9%, Andreessen Horowitz at 16.2%, Carrick Capital at 9.9%, and Comcast Ventures at 6.9%

Andreessen Horowitz also led a recent round in another Tom Spann-founded startup, Brightside. .Spann has no formal ties to Acccolade since stepping down from its. board late last year.

Accolade showed a $51.3 million net loss on $132.5 million in revenue for its fiscal year ending Feb. 29. I don’t think its unit ecconomics have been proven out to the point where they are projectible yet.

But it will probably draw a great deal of interest as a new concept in the hot digital health sector.

The company has applied to list on Nasdaq, under the ticker “ACCD.”

BFTP Invests $1,435,500 in Young Companies with Return to Health Funding (Press Release)

Ben Franklin Portfolio Protection Investments Include 18 Early-Stage Firms

BFTP Invests $1,435,500 in Young Companies with Return to Health Funding

The Ben Franklin Technology Partners of Northeastern Pennsylvania (BFTP/NEP) announces that it has made emergency investments in 18 regional start-ups totaling $1,435,500 to protect existing portfolio clients during the economic crisis caused by COVID-19. The funds were provided through a $1 million disbursement from the Pennsylvania Department of Community and Economic Development (DCED) that was matched by BFTP/NEP.

BFTP/NEP also invested $404,370 in 17 established manufacturers in this round with support from DCED. Ben Franklin’s total Return to Health investments in the northeastern Pennsylvania economy is $1,840,470, invested in 35 companies.

BFTP/NEP developed a Return to Health funding program including various types of company investments. Portfolio Protection Investments will help secure BFTP/NEP’s existing investments in pre-COVID-19 viable and growing early-stage clients. These clients were performing strongly in job and revenue growth, loan performance, and/or were developing promising product or patent portfolios.

BFTP/NEP announces the following Portfolio Protection Investments in early-stage, technology-based firms in its 21-county service area, which are provided as 0% loans.

Advanced Photonics Sciences, https://www.apslasers.com/, Friendsville, Susquehanna County

Ben Franklin Investment: $100,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. Advanced Photonics Sciences (APS) is a premier manufacturer and supplier of lasers, optics, and photonics systems including miniaturized diode-direct and solid-state lasers, modules, and high-powered cryogenic lasers for commercial and specialized defense applications. APS is a recognized leader in photonics innovation and engineering, including the development of precision quality crystals. 

American Paper Bag, LLC, www.americanpaperbag.com, Sugar Notch, Luzerne County

Ben Franklin Investment: $50,000

Address raw material costs and improve the company’s competitiveness during the economic downturn caused by COVID-19.. American Paper Bag (APB) is a leading U.S.-based producer of customizable and environmentally friendly paper bags. Currently, most retail carrier bags in the U.S. are plastic and produced in China. APB’s paper bags are greener and provide users with many distinctive branding opportunities. Its proprietary manufacturing process and new shape give APB a competitive advantage over other U.S. bag producers.

CDC Software, LLC, https://www.cdcsoftware.com/, Bloomsburg Regional Technology Center, Bloomsburg, Columbia County

Ben Franklin Investment: $100,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. CDC Software’s platform greatly reduces the time and cost of integrating telephony systems with Customer Relationship Management (CRM) and business systems. Highly configurable and supporting all major telephony providers, the platform provides complete customer data immediately to a representative answering a customer’s call to enable a productive and satisfying customer experience.

ConnexiCore, LLC, www.connexicore.com/, Milford, Pike County

Ben Franklin investment: $50,000

Support marketing and lead generation work to improve the company’s competitiveness during the economic downturn caused by COVID-19. ConnexiCore is growing an elite national network of licensed remote drone pilots, which allow clients to engage in no-touch data collection. Using its exclusive cloud-based Software-as-a-Service flight management and analysis platform, ConnexiCore’s turnkey approach manages the entire process, from aerial telepresence and data collection, to image and video analysis, to extracting insights from that data, to delivering measurable actionable tasks to support decision making for industry. Clients leverage drone-based aerial data to create efficiencies that save time and money.

Galaxy Brushes, http://www.galaxybrushes.com/, Moosic, Lackawanna County

Ben Franklin Investment: $100,000

Optimize workflow to address supply chain risk, manage inventory through disruptions, and improve the company’s competitiveness during the economic downturn caused by COVID-19. Galaxy Brushes manufactures cleaning and inspection brushes for the oil and gas pipeline industries and a range of custom wire cutting machines to improve production capacity and efficiency. The company developed a proprietary brush that has produced superior results in cleaning pipelines and wells. Effective cleaning grows more critical with the aging pipeline infrastructure and costs associated with contamination.

Gilson Snow, www.GilsonSnow.com, Winfield, Snyder County

Ben Franklin Investment: $90,000

Support a return to full-time production after a major reduction in staffing due to COVID-19. Until the shutdown, revenues were up 70% over the same period last year. Gilson Snow manufactures innovative snowboards and skis. Applying aeronautical engineering concepts, Gilson products have a three-dimensional base that offers the “Gilson Edge” for a buttery and “surfy” feel not offered in traditional products. Gilson builds snowboards and skis from sustainably harvested Pennsylvania poplar and focuses on both technological innovation and aesthetic design. The company ships to customers worldwide.

Howell Benefit Technologies, LLC, www.ratecentric.com , TekRidge, Jessup, Lackawanna County

Ben Franklin Investment: $67,500

Support staff and programming and improve the company’s competitiveness during the economic downturn caused by COVID-19. Howell Benefit Technologies, LLC provides online proprietary small-group insurance platforms used by national group insurance carriers that allow agents to reduce the quoting, enrollment, and submission process from three weeks to one hour. Providing real-time rates in a highly complex industry is a paradigm shift in the way group insurance is currently sold and administered. HBT also builds and maintains group insurance premium billing platforms and offers agent license tracking and commission payments online.

LifeAire Systems, LLC, www.lifeaire.com, Allentown, Lehigh County

Ben Franklin Investment: $100,000

Commercialize LifeAire’s Aire~PPE™ Decontamination Unit (pending US FDA approval), which kills COVID-19 and other bacteria, viruses, and fungi on the surface and within the layers of N-95 masks, allowing for safe and quick reuse of masks. Twenty-one masks can be comprehensively and safely decontaminated in 3½ minutes, allowing users to get their own masks back. Up to 8,500 masks can be decontaminated each day, allowing the unit to pay for itself in cost savings in less than a day. LifeAire Systems develops, manufactures, and commercializes revolutionary in-duct air purification systems for the healthcare, long-term care and life sciences industries that effectively kills all infectious airborne pathogens. Because of COVID-19, LifeAire pivoted, applying its technology in developing the mask decontamination unit to help address the pressing N95 shortage.

Mystic Mountaintop Productions, LLC, www.mysticmountaintop.com, Kunkletown, Monroe County

Ben Franklin investment: $38,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. Mystic Mountaintop produces a proprietary “smart” LED lighting system for the middle- to low-end entertainment industry. The system includes a hybrid analog/digital computerized lighting console, local and wireless remote control via a smart phone or tablet, a lighting power and control distribution unit, and installation hardware. Primary clients are small venues, such as auditoriums, churches, and nightclubs, which want a lighting system that is affordable but offers the quality and functionality of systems designed for larger facilities.

OPTiMO Information Technology, LLC, https://www.optimo-it.com/, Bloomsburg, Columbia County

Ben Franklin Investment: $62,500

Allow OPTiMO to develop a cloud-based process automation tool that will streamline business workflows and reduce operating costs for greater efficiency for major clients in the U.S Government. The company provides innovative digital-product-development services with a focus on the end-user experience. OPTiMO delivers enterprise-level information technology solutions to clients nationwide.

Orbweaver Sourcing, LLC, https://www.orbweaver.com/, Bethlehem, Northampton County

Ben Franklin Investment: $100,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. Orbweaver is the first and only provider of complete, real-time supply chain integration solutions for the electronics manufacturing industry. Orbweaver’s suite of products and services empowers distributors, manufacturers and contract manufacturers to instantly and securely transfer and use critical supply chain data, resulting in dramatic increases in efficiency, reductions in cost and improvements in customer service.

planguru, LLC, www.planguru.com, Wilkes-Barre, Luzerne County

Ben Franklin Investment: $100,000

Support product development, marketing, and staffing to improve the company’s competitiveness during the economic downturn caused by COVID-19. The company is currently rolling out its new cloud-based Planguru app. Planguru provides businesses and business advisors with Software-as-a-System (SaaS)-based budgeting, forecasting and business analytics tools. This information enables small- and medium-sized businesses to make better, more informed decisions.

Precision POS, LLC, www.precisionpos.com, TekRidge, Jessup, Lackawanna County

Ben Franklin Investment: $35,000

Support product enhancements that address COVID-19 restrictions, including contact-less curbside pickup, additional delivery options, and an app for delivery driver management. Precision POS offers advanced tablet and cloud based point-of-sale, on-line ordering, and various other supporting products for the restaurant industry and other related food and beverage industries. 

Rocket Cloud, Inc., www.RocketCl.com, Ben Franklin TechVentures, Bethlehem, Northampton County

Ben Franklin Investment: $100,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. Rocket Cloud helps industrial wholesalers successfully sell online. The firm creates visibility for clients’ inventory on marketplaces such as Amazon, eBay, and Walmart by connecting directly with their ERP systems. Rocket Cloud’s enterprise suite handles inventory replenishment, repricing, and accounting/reconciliation, along with providing analytics to monitor performance. Rocket Cloud is also rolling out an industrial marketplace, ProSupplyDirect, which will address limitations on B2C marketplaces.

Saladax Biomedical, Inc., https://saladax.com/, Ben Franklin TechVentures, Bethlehem, Northampton County

Ben Franklin Investment: $100,000

Support distribution of COVID-19 test and sales of Saladax’s test for measuring adherence to antipsychotic medications. Saladax develops rapid blood tests for point-of-care and for laboratory analyzers for use in psychiatry and oncology. The firm has been supplying laboratories and clinicians worldwide with revolutionary diagnostic solutions for more than 15 years. Its experience and expertise allow it to create leading products that offer reliable and rapid diagnosis. The company is awaiting US FDA emergency use authorization for a blood test for coronavirus antibodies.

Signallamp Health, INC, https://signallamphealth.com/, Scranton, Lackawanna County

Ben Franklin Investment: $100,000

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. The use of telemedicine for healthcare during the pandemic has been pivotal to protect patients and healthcare staff, and to reduce the spread of the coronavirus. Signallamp Health’s remote clinical services platform supports healthcare providers by triaging and assessing ill patients, including those affected by COVID-19, as well as patients with other conditions. Signallamp’s services are remote, engaging nurses and other clinical staff by telephone, text monitoring system, video conference, and/or other telehealth and telemedicine methods. The company’s model is plug-and-play, working alongside existing Electronic Medical Records. Trusted by a growing number of provider organizations in 10 states, Signallamp allows doctors to provide a value-added service to a larger number of patients and to achieve better health outcomes for patients. 

US Specialty Formulations, LLC, https://www.usspecialtyformulations.com/, Ben Franklin TechVentures, Bethlehem, Northampton County

Ben Franklin Investment: $75,000

Support the logistics and purchase of equipment to expand an analytical lab to meet steep demand for pre-clinical materials for use in a novel SARS-CoV-2 (COVID-19) vaccine. US Specialty Formulations (USSF) manufactures sterile injectable pharmaceuticals used by healthcare providers or in new drug or vaccine clinical trials. Millions of Americans require specialized and custom-manufactured drugs, and the current infrastructure is insufficient to support their therapies. These specially prepared drugs are U.S. Food & Drug Administration (FDA)-approved medications and are provided globally. 

webCemeteries.com, www.webcemeteries.com, Kutztown, Berks County

Ben Franklin Investment: $67,500

Support and improve the company’s competitiveness during the economic downturn caused by COVID-19. webCemeteries helps cemeteries manage complex records through powerful online systems to help serve bereaved families, including locating loved ones with GPS and sharing memories online.

About the Ben Franklin Technology Partners of Northeastern Pennsylvania

The Ben Franklin Technology Partners of Northeastern Pennsylvania (BFTP/NEP) creates and retains highly paid, sustainable jobs by investing in and linking companies with experts, universities, follow-on funding, and other resources to help them prosper through innovation. It is part of a four-center economic development initiative of the Pennsylvania Department of Community and Economic Development and is funded by the Ben Franklin Technology Development Authority.

BFTP/NEP’s strategy encompasses three key areas:

1.     developing and growing early-stage technology-oriented companies;

2.     supporting established manufacturers as they creatively apply new technology to help them succeed globally by producing better, faster, and at a lower cost;

3.     promoting an innovative community-wide infrastructure that supports Pennsylvania’s business technology ecosystem.

Since beginning operations in 1983, BFTP/NEP has helped to create 19,257 new jobs for Pennsylvania workers and to retain 43,880 existing jobs, to start 525 new companies, and to develop 2,113 new products and processes. Since 2007, BFTP/NEP clients have generated more than $1.6 billion in follow-on funding. The Pennsylvania Ben Franklin Technology Partners network has returned $3.90 to the state treasury for every $1.00 invested in the program.

BFTP/NEP owns, manages, and is headquartered in Ben Franklin TechVentures®, an award-winning business incubator/post-incubator facility on Lehigh University’s campus in Bethlehem. BFTP/NEP also owns and manages the Bloomsburg Regional Technology Center. Applying more than 35 years of experience and two international awards for excellence in business incubation, BFTP/NEP leads a 13-member business incubator network that is among the largest in the nation.

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Philly EnterpriseTech Highlights June 18-21: RoseAnn Rosenthal stepping down as CEO of Ben Franklin; Crozer-Keystone reacts to Malware attack bit.ly/3fIM8p9