Digital healthcare company Babylon calls in administrators following share price collapse

The digital healthcare company behind the NHS GP at Hand app has placed two of its British businesses into administration.

Babylon Health, whose platforms have been used by 700,000 people in the UK, had been championed by former Health Secretary Matt Hancock as ‘revolutionary’ and soared in popularity during the pandemic, providing digital health options for the public.

The company’s GP at Hand app, which is funded by the NHS, became the first GP service in the UK to get a list of more than 100,000 patients in August 2021.

But the restructuring firm Alvarez & Marsal said late last night it had been appointed administrator for its UK holding company, as well as Babylon Partners, its research and artificial intelligence division. 

It also said Babylon’s clinical services business, which includes its GP at Hand app, was sold solvently to US digital health business Emed Healthcare.

Babylon, which was founded in 2013 by British-Iranian entrepreneur Ali Parsa, employs more than 650 people in Britain, according to Linkedin

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.’ 

Babylon, which was founded in 2013 by British-Iranian entrepreneur Ali Parsa, employs more than 650 people in Britain, according to Linkedin.

The company has had a bumpy ride in recent years despite initial investment from Saudi Arabia’s sovereign wealth fund, Swedish venture capital group Kinnevik and data company Palantir, and went public in 2021.

While at one stage valued more than £3.1billion, making Parsa a paper billionaire, Babylon’s value quickly collapsed.

It lost $221million (£173.7million) last year amid efforts to expand into the US, while relations with doctors soured after it made bold claims about the AI behind its app, which was questioned by healthcare experts.

The share price collapsed by more than 99 per cent over the course of two years after going public. 

In the face of its funding shortfall, it slashed jobs and cancelled NHS partnerships – ultimately leading to losses and dwindling shareholder confidence.

Some medical experts have also questioned the science behind the business, which included a controversial chatbot, which claimed it could diagnose illnesses.

Earlier this month, a merger deal that could have saved the business fell apart.

Parsa was granted asylum in the UK after fleeing his homeland in 1981 following the Islamic Revolution. He founded Babylon in 2014 as a telephone appointment service for GP surgeries.

In 2004 he launched Circle Health, a hospital operator which became Europe’s largest partnership of clinicians. It was bought by Toscafund in 2017 for £74million.

This post first appeared on Dailymail.co.uk