InstaMed Inc., a private company that processes out-of-pocket healthcare payments from offices in Newport Beach and Philadelphia, recently raised $5.5 million in a round of private equity funding.
InstaMed declined comment on the investors’ identity or how it plans to use the money.
InstaMed processes payments for healthcare services through a network that connects providers, insurers and patients. Its clients include more than 200,000 healthcare providers across the country.
The company started operations in 2005 and now employs about 80 workers.
It doesn’t disclose its sales or earnings.
With the new funding, InstaMed has raised some $27.5 million through a mix of debt and equity.
It’s most recent prior round of funding came in September 2010, when it raised $6 million to bolster its data center’s infrastructure and operations and to develop new business.
Prior Investors
InstaMed’s prior investors have included members of what the company describes as a private equity group that’s based in Newport Beach and is made up of members of eight wealthy Southern California families. Among other prior investors are the U.S. Bank National Association, a wholly owned subsidiary of Minneapolis-based U.S. Bancorp.; Osage Partners in Bala Cynwyd, Penn.; Ashby Point Capital of Arnold, Md.; and the NJTC Venture Fund in Mount Laurel, N.J.
InstaMed is generally known for healthcare information technology but considers itself more of a service provider than a software company, according to an earlier interview with Chris Seib, who serves as InstaMed’s chief technical officer and works from its Newport Beach office.
Seib started the company seven years ago with Chief Executive Bill Marvin. Both were previously executives in the healthcare and life science practice of consulting firm Accenture Ltd.
At Accenture, the pair “consulted with the large health insurance companies like Aetna and WellPoint (now Anthem Inc.) in this area of electronic communication between doctors and insurance companies,” Seib said.
“Emerging Shift”
Seib said they both recognized “an emerging shift in healthcare being more payments coming out of the patient’s pocket and said, ‘Look, there’s a lot of work that can be done in making healthcare more electronic and it’s going to be more important to have a payment process that works.’ ”
Competitors include First Data Corp. of Atlanta, which provides electronic commerce and payment services, and the healthcare software unit of Irvine-based Sage Software Inc.
InstaMed has worked with some of the country’s largest banks. For instance, San Francisco-based Wells Fargo & Co. introduced an online healthcare payment system based on InstaMed technology in March.
InstaMed also is working with NextGen Healthcare Information Systems Inc., a Philadelphia-based subsidiary of Quality Systems Inc. in Irvine. That project involves software designed to streamline and improve collecting patient payments for NextGen’s customers.
InstaMed has focused on building its business rather than being acquired or doing an initial public offering, said Seib, who spent 13 years as a Newport Beach lifeguard.
“Healthcare is a big opportunity and the problem we’re tackling is a large one,” Seib said. “We’re very focused on building and scaling to solve it.”
