What J.P. Morgan’s $500M Acquisition of InstaMed Means for Philadelphia

There’s nothing like a big, half-billion-dollar-plus exit to boost a startup ecosystem. In the last 15 months, the Philadelphia region has seen three.

“That’s a big deal for any market,” said Dean Miller, CEO and president of the Philadelphia Alliance for Capital and Technologies.

The latest is J.P. Morgan’s more than $500 million acquisition of Center City health care payment tech firm InstaMed. The deal comes about three months after Swiss pharma giant Roche said it agreed to buy Spark Therapeutics for $4.8 billion, and a little over a year after Paris-based Capgemini scooped up Wayne’s LiquidHub for about $500 million.

“[The InstaMed deal] is the third that is at that scale, which is huge,” Miller said.

While InstaMed declined to discuss its equity-backed investors and their returns in the wake of the deal, past media reports listed regionally-based Osage Partners, NJTC Venture Fund, Ben Franklin Technology Partners and Midas Capital, the personal investment fund for First Round Capital’s Josh Kopelman, as investors.

Prolific, state-backed seed fund Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP) poured a total of $500,000 in to InstaMed over the years, its CEO RoseAnn B. Rosenthal said. She declined to disclose BFTP’s return, but said the deal will deliver a return to the region.

“It causes talent and investments elsewhere to take another look at Philadelphia,” she said. “I think it also sends a message to local investors that if they haven’t been engaged, maybe they should think about that again.”

InstaMed’s growth in the region shows a successful tech company can be built and sold sustainably, Miller said, and done in a way that’s not a quick flip with ephemeral local impact.

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