British digital health startup Babylon Health went public in June 2021 at a $4.2 billion valuation. Just over two years later, the company has filed for bankruptcy and one of the core parts of the business, its U.K. telemedicine service, was sold for just $620,000 (£500,000).
Bankruptcy filings published on September 19 revealed the previously undisclosed value of the sale of Babylon’s U.K operations to U.S. digital health business eMed earlier this month. The report from administrator Alvarez & Marsal also revealed that attempts to sell the entire business had failed due its debt burden and dwindling cash reserves. Representatives for Babylon did not immediately respond to requests for comment. Alvarez & Marsal declined to comment beyond what was in the filing.
These British operations were the origins of Babylon’s business, which at one point had contracts with the U.K.’s National Health Service to provide family doctors via phone and online appointments. However, according to the filing, by the time of the bankruptcy it accounted for less than 6% of the group’s total revenue.
Shareholders in Babylon, which went public on the Nasdaq via a merger with a SPAC, were wiped out when the company’s main lender AlbaCore Capital, a European credit fund, took control of the businesses. Now Babylon owes AlbaCore a combined $380.5 million in loans, according to the filing. Only $34.5 million of that is secured against collateral. The bankruptcy filing notes AlbaCore “will receive a distribution, however, it will suffer a shortfall.” AlbaCore did not immediately respond to a request for comment.
The estimates of the total assets available for Babylon’s U.K.-based holding company are $35.2 million (£28.4 million), while its liabilities total more than $378.4 million (£305.3 million). “There are insufficient funds to enable a distribution to be made to unsecured creditors,” the filing states.
Babylon founder and CEO Ali Parsa called the decision to go public in a SPAC deal an “unbelievable, unmitigated disaster” in an interview with the Financial Times last year. The company had in April 2023 called on the American arm of consultants Alvarez & Marsal to help restructure and secure financing after being left with less than 13-weeks of cash flow. Parsa did not immediately respond to a phone call seeking comment; his Babylon email address bounced back.
In early August, a proposed “business combination” including Swiss-based digital therapeutics company MindMaze and creditor AlbaCore fell through. A few days later, Forbes reported Babylon began shuttering its U.S. operations, laying off staff and closing its Austin, Texas headquarters. Forbes also reported Babylon was “winding down” its Rwanda operations, where the company had inked a 10-year partnership with the government to deliver primary care services.
On August 9, Babylon filed for Chapter 7 bankruptcy protection for two of its U.S. 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 a tip about Babylon? Contact U.S.-based reporter Katie Jennings via the Signal app at +1-646-504-3008 or katiedjennings@protonmail.com. Contact U.K.-based reporter Iain Martin at imartin@forbes.com.