Babylon Health

Babylon Health was a London-based digital health company founded in 2013 by Ali Parsa that provided AI-based health services, including a symptom checker and telehealth consultations.²⁵⁷⁹ The company went public via a SPAC merger in 2021 at a valuation of $4.2 billion, but its share price collapsed and it faced mounting losses.²³⁵⁹¹⁴ In 2023, Babylon's U.S. subsidiaries filed for Chapter 7 bankruptcy, and its U.K. business entered administration and was sold to eMed Healthcare UK.^25121314

Timeline

Money raised

Babylon Health raised a $550 million Series C round in August 2019, valuing the company at more than $2 billion.⁷⁸ The Series C round included investors such as Saudi Arabia's Public Investment Fund, a large U.S.-based health insurance company, Munich Re's ERGO Fund, and returning investors Kinnevik and Vostok New Ventures.⁷ Prior to the Series C, Babylon had raised about £72 million in total.⁷ By 2020, Babylon Health had raised more than $630 million at a valuation of about $2 billion.⁹ Babylon went public via a SPAC merger in 2021 with a pro forma valuation of $4.2 billion.²³⁵⁹¹⁴ The SPAC merger was expected to net Babylon Health as much as $575 million, including $345 million in cash held by Alkuri and $230 million in private investments at $10 per share.⁹ In 2022, Babylon lost $221 million, and in the first three months of 2023, it lost a further $63 million.⁵ In May 2023, Babylon's largest lender, AlbaCore Capital, injected $34.5 million and took the company private.³⁵ Babylon's U.S. subsidiaries filed for Chapter 7 bankruptcy with estimated debts of $100 million to $500 million and no funds projected for distribution to unsecured creditors.¹⁴

Investors named in the sources: Saudi Arabia's Public Investment Fund⁷, Kinnevik⁷, Vostok New Ventures⁷, Munich Re's ERGO Fund⁷, Centene Corporation⁷, Demis Hassabis⁷, Palantir⁹, AlbaCore Capital³⁵.

What happened

Babylon Health was founded in London in 2013 by Ali Parsa, a British-Iranian ex-banker.^2591014 The company aimed to make healthcare freely and easily available to everyone, similar to what Google did with information.⁵ Babylon initially built an app that allowed patients to have video calls with doctors.⁵ The company planned to add an AI-powered symptom checker to speed up or automate diagnoses.⁵ In 2016, Hugh Harvey joined Babylon as a consultant doctor and found that the AI was actually based on Excel spreadsheets containing clinical decision pathways written by junior doctors.⁵

Babylon launched its symptom-checking app, GP at Hand, in 2017.⁵ In 2017, Babylon claimed its AI performed better than humans on a medical exam, but experts quickly questioned the claim.⁵ A 2017 report from the Care Quality Commission called the safety and effectiveness of Babylon's services into question, and Babylon threatened to sue.⁵ In 2019, Babylon raised a $550 million Series C round at a valuation of more than $2 billion.⁷⁸ The company expanded to the U.S. and Asia, and by 2019 it said it delivered 4,000 clinical consultations each day and covered 4.3 million people worldwide.⁷

In 2020, Babylon admitted that its GP at Hand app had suffered a data breach that allowed users to see other patients' video consultations.⁵ Babylon went public via a SPAC merger in 2021 with a pro forma valuation of $4.2 billion.²³⁵⁹¹⁴ After going public, Babylon acquired Meritage Medical Network and First Choice Medical Group in the U.S., adding around 50,000 capitated lives.³⁹ The company's share price dropped 99% within 18 months of listing.⁵ In 2022, Babylon lost major contracts in the U.K., including the NHS deal with Wolverhampton.²

Babylon lost $221 million in 2022 and $63 million in the first quarter of 2023.⁵ In May 2023, Babylon's largest lender, AlbaCore Capital, took the company private and injected $34.5 million.³⁵ Babylon attempted to merge with Swiss health tech startup MindMaze, but the deal fell through in early August 2023.²⁵ Babylon's U.S. subsidiaries filed for Chapter 7 bankruptcy on August 15, 2023.¹²¹³¹⁴ The U.S. subsidiaries had estimated debts of $100 million to $500 million and no funds projected for distribution to unsecured creditors.¹⁴

Babylon's U.K. subsidiary entered administration on August 31, 2023.² Administrators Alvarez & Marsal sold a large chunk of Babylon's U.K. assets to eMed Healthcare UK, a subsidiary of U.S. company eMed.² The sale included a preventative telehealth practice serving around 700,000 people in the U.K. through contracts with providers like Bupa.² GP at Hand, the app and service powered by Babylon, was not part of the sale and remained operational.² Babylon's U.S. shares were virtually worthless, with a market cap of just over $5,000.²

Babylon's founder and CEO, Ali Parsa, described the share price nosedive as an 'unbelievable, unmitigated disaster.'⁵ Former employees said Parsa was obsessed with 'blitzscaling' and that the company had uncontrolled hiring sprees and overlapping projects.⁵ A clinician in the U.K. raised concerns about patient safety and corporate governance for years, and the U.K. medical regulator shared those concerns.² Babylon's U.S. operations were wound down, and employees were laid off.²⁵ The company's U.K. employees were included in the sale to eMed, but the number of people impacted was not disclosed.²

Babylon's customers in the U.K. were expected to continue operating as normal under eMed, according to the administrators.² Babylon's U.S. customers were left without services as the company liquidated.¹⁴

Legal outcomes

• filedBabylon threatened to sue the Care Quality Commission over its 2017 report questioning the safety and effectiveness of its services.⁵
• filedBabylon's U.S. subsidiaries filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Delaware.¹²¹³¹⁴
• filedBabylon's U.K. subsidiary entered administration, a process similar to bankruptcy protection in the U.S.²⁵

Where the founders are now

Ali Parsa founded Babylon Health in 2013 and served as its CEO until the company's collapse.^2591014 In November 2024, a podcast episode discussed Ali Parsa's next act: an AI health mega-assistant.¹⁷

Sources

2. The fall of Babylon: Failed telehealth startup once valued at $2B goes bankrupt, sold for parts | TechCrunch, TechCrunch, 2023-08-31
3. The Downfall of Babylon Health - Hospitalogy, Hospitalogy, 2023-05-16
5. The Fall of Babylon Is a Warning for AI Unicorns, WIRED, 2023-09-19
7. Babylon Health confirms $550M raise at $2B+ valuation to expand its AI-based health services | TechCrunch, TechCrunch, 2019-08-02
8. AI startup Babylon Health raises record-breaking $550M, beckershospitalreview.com, Aug 5, 201
9. Babylon Health Stock: Value-Based Care Using Telehealth - Nanalyze, Nanalyze, 2021-06-18
10. Strategic Insights: The Last King of Babylon, haverin.substack.com, 5 months a
12. Babylon Health Files For Bankruptcy In U.S., Will Liquidate, forbes.com, Aug 15, 20
13. Babylon files for liquidation in US Bankruptcy Court, digitalhealth.net, Aug 21, 20
14. Healthcare Babylon: They Reimagined Healthcare Right Into Chapter 7 Bankruptcy, Wisdom. Applied., 2023-08-21
17. Babylon Founder Ali Parsa’s Next Act: AI Health Mega-Assistant, Apple Podcasts, Nov 14, 20

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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