Yahoo Finance Babylon virtual GP puts two divisions into administration
Babylon, the digital healthcare company behind the NHS’s GP at Hand app, has placed two of its divisions into administration.
Restructuring firm Alvarez & Marsal confirmed late on Wednesday it had been appointed administrator of two of Babylon’s UK businesses.
Court records showed that Babylon Group Holdings, its UK holding company, and Babylon Partners, its research and artificial intelligence division, had filed notices disclosing the appointment of administrators.
Immediately following the appointment, Babylon’s clinical services business, which includes its GP at Hand app that serves 100,000 NHS patients, was sold solvently to US business eMed Healthcare, a digital health company.
The sale also includes its private clinical and corporate health offerings. In total, Babylon has over 700,000 UK patients.
Andrea Jakes, managing director, Alvarez & Marsal Europe, said “The appointment of administrators over Babylon’s UK business to facilitate a sale to eMed ensures the least possible disruption for Babylon users, which should continue to operate as normal.”
The administration also does not include Babylon’s Jersey holding company.
Babylon, founded by Iranian-born entrepreneur Ali Parsa and at one point valued at $4bn, had been seeking rescue funding or a buyer for its businesses amid a cash crisis.
A spokesman for NHS North West London, where Babylon provided GP appointments, said it remained in regular contact with GP at Hand and expected to be alerted of any change to the service.
The company, which runs a video GP service in London and offers a symptom-checking app, had already placed its US business into bankruptcy protection.
Babylon employs more than 650 people in Britain, according to LinkedIn data, although it was not immediately clear how many jobs were at risk and how many would be transferred in the sale. Hundreds of staff in the US have already lost their jobs.
At one time championed by former Health Secretary Matt Hancock as “revolutionary”, Babylon provided digital health services to NHS patients in London before expanding internationally.
However, a disastrous float followed. Investors pulled funding from the deal ahead of a merger with a Special Purpose Acquisition Company. While at one stage valued more than $4bn (£3.1bn), making Mr Parsa a paper billionaire, Babylon’s value quickly collapsed.
It lost $221m last year amid costly efforts to expand into the US, while Babylon’s relations with doctors soured after it made bold claims about the AI behind its app, which was questioned by healthcare experts.
Despite raising more than $1bn from venture capital investors, including Saudi Arabia’s sovereign wealth fund, the company’s share price collapsed by more than 99pc over the course of two years after going public in 2021. It was also forced to turn to lenders for more than $300m in debt funding.
Earlier this month, a merger deal that could have salvaged Babylon fell apart.
At the time, the company warned the future of its business in the UK was in doubt, and unless a buyer could be found in a firesale it would be placed into administration.
Babylon’s holding company is incorporated in Jersey, while it is listed in the US. It has also been seeking a buyer for one of its US divisions – a clinical business based in California.
