• Healthcare

Babylon Health’s Decline: Asset Sale to eMed Amid Bankruptcy

August 20, 2023

https://drive.google.com/file/d/1isCXcKeA7JwVqvXtmWPN_-lLMPy7kP-9/view?usp=drive_link

Babylon Health, once a notable name in digital primary healthcare, is parting with most of its assets, selling them to US-based eMed Healthcare through a bankruptcy process.

Alvarez & Marsal Europe LLP, a restructuring firm, on August 30, announced its role as the appointed administrator for Babylon Group Holdings Limited and Babylon Partners Limited. This announcement resulted in the immediate sale of certain of Babylon’s UK operations and assets to eMed Healthcare UK Limited, a subsidiary of eMed. These assets represent the majority of Babylon Health’s technology-driven preventative healthcare services, which presently serve 700,000 people.

According to Andrea Jakes, Managing Director at Alvarez & Marsal Europe LLP, the move to appoint administrators for Babylon’s UK business to ensure a sale to eMed aims to guarantee the least disruption for Babylon’s loyal users. The service is anticipated to resume normal operations.

Despite the sales, Babylon GP at Hand, the company’s online-first primary care medical service under contract with the National Health Service (NHS) in the UK, is still functional and is not part of the sales process.

In its prime, Babylon was celebrated for its integrated primary care model and its healthcare app for AI-powered diagnosis and video appointments, backed by a value-based care platform called Babylon 360. The company, founded in 2013, went public in October 2021, entering a $4.2 billion SPAC deal with Alkuri Global Acquisition Corp.

In a recent filing with the U.S. Securities and Exchange Commission (SEC), Babylon Holdings Limited has stated that after exploring strategic alternatives, eMed has acquired substantially all of the company’s remaining UK business assets. The new organizational focus will be on continuing the day-to-day operations of the UK business.

Despite the sale providing financial stability, it will not yield any payment to Babylon’s Class A ordinary shareholders and other equity instrument holders. Babylon’s attempt to mark its presence in the US market saw a rapid expansion in 18 months, but also a significant burn through cash, leading to exacerbated losses.

Reported in 2022, the company incurred a net loss of $221 million on $1 billion in revenue. Their first-quarter loss in the next year saw a sharp increase, doubling from the first quarter of 2022. Although Babylon had announced a take-private deal with digital neurotherapy company MindMaze in May, this arrangement unfortunately collapsed within a month.

In conclusion, Babylon Health’s decline and the subsequent sale of its assets to eMed Healthcare signal a significant shift in the digital health landscape, underlining the challenges faced by health tech companies in maintaining sustainability and profitability in a rapidly evolving market.

Sources:
https://www.fiercehealthcare.com/digital-health/babylon-closes-us-business-lays-employees-after-mindmaze-take-private-deal-collapses
https://www.fiercehealthcare.com/digital-health/another-day-another-spac-digital-health-player-babylon-health-to-go-public-via-4-2b
https://ir.babylonhealth.com/sec-filings/all-sec-filings/content/0001104659-23-097308/0001104659-23-097308.pdf

The fall of Babylon: Failed telehealth startup once valued at $2B goes bankrupt, sold for parts

https://www.fiercehealthcare.com/digital-health/digital-health-company-babylon-health-plans-go-private-losses-grow