Yahoo Finance Tech company behind NHS digital GP app faces collapse
The tech company behind the NHS’s GP at Hand app has warned it is on the brink of collapse as it launched a fire sale of its assets.
Babylon Health, which provides virtual appointments and a symptom-checker app, said it is looking to offload “its UK business to third parties”, which includes the GP at Hand service that serves over 100,000 NHS patients.
In a regulatory filing on Monday, the business said it was exploring rescue options in both the US and UK after a deal to merge with MindMaze, a Swiss healthcare technology firm, fell apart.
Babylon warned it may not be able to secure enough cash “to fund the operations of the group’s businesses”, but it is understood its UK arm will continue for the time being.
Once viewed as one of Britain’s most promising start-ups, Babylon listed in the US for $4bn (£3.1bn) less than two years ago.
However, it was forced into a restructuring deal in May after its share price plunged by more than 99 percent, wiping billions of dollars off its value.
Babylon said its owners were still seeking additional funding or a sale of its businesses, but if this failed, it would consider an “orderly wind down”.
It said this could include exploring US bankruptcy or filing for administration in the UK. It added it planned to shut down its core US division.
On Monday, a number of US-based Babylon employees revealed on LinkedIn that they had lost their jobs.
Earlier this year, The Telegraph revealed that Babylon was on the brink after accounts revealed it was set to run out of cash within weeks.
It was forced to turn to lenders AlbaCore for tens of millions of pounds in bridge financing and Babylon now owes the lender more than $300m.
Babylon’s IPO, completed in 2021 via a special purpose acquisition company, failed to raise as much funding as expected.
Chief executive Ali Parsa previously described the float as an “unmitigated disaster” and “a very big mistake”.
Mr Parsa previously founded Circle Health, which ran private hospitals in the UK.
Babylon was subsequently launched in 2013 and soon became an NHS supplier.
The company was championed by Matt Hancock while he was Health Secretary, although Mr Parsa complained its NHS work failed to turn a profit.
While Babylon made Mr Parsa a paper billionaire when it went public, the business failed to ever make a profit and burned through hundreds of millions of dollars in funding.
In its annual results for 2022, Babylon reported revenues of $1.1bn and a net loss of $221m.
It laid off hundreds of staff to cut costs.
There is hope Babylon can still strike a deal to sell off its UK arm, as it said in its regulatory filing that it “was exploring strategic alternatives in order to find the best possible outcome”.
It said: “Babylon remains focused on continuing the day-to-day operations of its UK business.”
Both Babylon and AlbaCore declined to comment.
