The British telehealth startup, founded by Ali Parsa, sold its UK branch for about $620,000, leaving investors with millions of dollars in losses, bankruptcy filings show.
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British digital health startup Babylon Health went public in June 2021 at a valuation of $4.2 billion. Just two years later, the company has filed for bankruptcy and one of the core parts of the business, its UK telemedicine service, was sold for just $620,000 (£500,000).
A bankruptcy filing published on September 19 revealed the previously undisclosed value of the sale of Babylon’s UK operations to US digital health business Emed earlier this month. The report by administrators Alvarez and Marsal also revealed that efforts to sell the entire business had failed due to the debt burden and declining cash reserves. Representatives for Babylon did not immediately respond to requests for comment. Alvarez and Marsal declined to comment beyond what was said in the filing.
These British operations were the core of the Babylon business, which at one time had a contract with the UK National Health Service to provide family doctors via phone and online appointments. However, according to the filing, it accounted for less than 6% of the group’s total revenue by the time of the bankruptcy.
Shareholders in Babylon, which went public on the Nasdaq through a merger with a SPAC, were decimated when the company’s main lender Albacore Capital, a European credit fund, took control of the businesses. Babylon now owes Albacore a total of $380.5 million in debt, according to the filing. Of this, only $34.5 million is secured against collateral. The bankruptcy filing notes Albacore “will receive distributions, however, there will be shortfalls.” Albacore did not immediately respond to a request for comment.
The total assets available for Babylon’s UK-based holding company are estimated at $35.2 million (£28.4 million), while its liabilities exceed $378.4 million (£305.3 million). “There are insufficient funds to enable distributions to unsecured creditors,” the filing said.
Babylon founder and CEO Ali Parsa called the decision to take the SPAC deal public in an interview as an “incredible, unmitigated disaster.” financial Times Last year. The company had called in the US arm of consultants Alvarez & Marsal to help it restructure and secure financing in April 2023 with less than 13 weeks of cash flow left. Parsa did not immediately respond to a phone call seeking comment; His Babylon email address came back.
In early August, a proposed “business combination” involving Swiss-based digital therapeutics company Mindmaze and lender Albacore failed. After a few days, forbes Babylon was reported to have begun winding down its US operations, laying off employees and closing its Austin, Texas headquarters. forbes It was also reported that Babylon was “closing down” its Rwanda operations, where the company had a 10-year partnership with the government to provide primary care services.
On August 9, Babylon filed for Chapter 7 bankruptcy protection for two of its US subsidiaries with the intention of liquidating. Babylon Inc. reported $309.3 million in assets and $389 million in liabilities, including $34.9 million in secured liabilities.
Got any information about Babylon? Contact US-based reporter Katie Jennings at +1-646-504-3008 via the Signal app or [email protected], Contact UK-based reporter Ian Martin [email protected],
