Digital healthcare company Babylon is calling out admins after its stock price crashed
The digital health company behind the NHS GP at Hand app has declared bankruptcy for two of its UK companies.
Described as “revolutionary” by former Health Secretary Matt Hancock, Babylon Health, whose platforms were used by 700,000 people in the UK, has enjoyed great popularity during the pandemic for offering digital health options to the public.
The company’s NHS-funded GP at Hand app, in August 2021, became the first GP service in the UK to receive a list of more than 100,000 patients.
But restructuring firm Alvarez & Marsal announced last night that it had been appointed administrator of its UK holding company, as well as Babylon Partners, its research and artificial intelligence division.
It also said Babylon’s clinical services business, which includes the GP at Hand app, has been sold to US digital healthcare company Emed Healthcare for cash.
Babylon, founded in 2013 by British-Iranian entrepreneur Ali Parsa, employs more than 650 people in the UK, according to Linkedin
Andrea Jakes, Managing Director of Alvarez & Marsal Europe, said: “The appointment of administrators for Babylon’s UK business to facilitate a sale to Emed ensures the least possible disruption to Babylon users, who should continue to function as usual.”
Babylon, founded in 2013 by British-Iranian entrepreneur Ali Parsa, employs more than 650 people in the UK, according to Linkedin.
The company has had a bumpy ride in recent years, despite initial investments from Saudi Arabia’s sovereign wealth fund, Swedish venture capital group Kinnevik and data company Palantir, and went public in 2021.
While Parsa was at one point worth more than £3.1 billion, making Parsa a paper billionaire, Babylon’s value quickly plummeted.
The company lost $221m (£173.7m) last year in efforts to expand into the US, while relations with doctors soured after the company made bold claims about the AI behind its app, which questioned by health experts.
The share price collapsed by more than 99 percent within two years after the IPO.
Faced with the funding shortfall, jobs were cut and NHS partnerships canceled – ultimately resulting in losses and dwindling shareholder confidence.
Some medical experts have also questioned the science behind the company, which included a controversial chatbot that claimed it could diagnose diseases.
Earlier this month, a merger deal that could have saved the company fell through.
Parsa was granted asylum in the UK after fleeing his homeland in 1981 following the Islamic Revolution. He founded Babylon in 2014 as a telephone appointment service for GP surgeries.
In 2004 he founded Circle Health, a hospital operator that became the largest hospital partnership in Europe. It was bought by Toscafund in 2017 for £74m.