Ali Parsa, CEO of Babylon Health, confirmed to FierceHealthcare yesterday that Babylon Health will be going public later this month via a SPAC. This is proceeding as closed in June with blank-check Alkuri Global Acquisition Corp., led by former Groupon CEO Rich Williams [TTA 1 June].
The pro-forma equity valuation is estimated as $4.2 billion, with Alkuri providing $575 million in gross proceeds to Babylon, including $230 million in a private placement from investors such as AMF Pensionsförsäkring and Palantir Technologies. The new Babylon Holdings Limited will be listed on the New York Stock Exchange under the ticker symbol BBLN.
After developing its GP in Hand triage service with the NHS starting in 2017, now claiming 102, 000 users, it has weathered controversies from clinical commissioning group (CCG) reservations to gender bias in its chatbot (‘Heart Sister’ Carolyn Thomas) to a litany from @DrMurphy11 to the BBC Two’s Newsnight treatment [TTA 9 Jan 20, 27 Feb 20]. However, Mr. Parsa believes that their value proposition (technically, a written document) is sound and that they are now poised for growth.
Newly developed products include Babylon 360, a digital-first value-based care service that includes the option for telehealth visits, and Babylon Cloud Services, a suite of digital self-care tools for patients and doctors, including an AI-enabled symptom checker. Expansion has been as far flung as Rwanda and the US, although in the crowded US telehealth market, Babylon has found it difficult to make a strong impression versus Teladoc and Amwell, though they cover three million lives and has licensed providers in all 50 states. They recently bought two California-based medical practices, Meritage Medical Network and First Choice Medical Group, opening an office in Palo Alto. Babylon also optioned to buy Higi health kiosks after a $30 million investment [TTA 30 May 20], which may close after the SPAC. Still, Mr. Parsa is staking the future on the US, where over 40% of global healthcare money is spent.
Babylon has been growing 400% year to year for a few years with $79 million in 2020 unaudited revenue, a 394% year-over-year increase, and a projected $321 million in 2021, $710 million by 2022, and $1.4 billion by 2023. Hampering this sunny picture are Babylon’s continued losses: $76 million first half of 2021, less than their PY net loss of $91 million.