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.