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Babylon reports ‘material uncertainties’ ahead of US stock market listing


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Babylon has said that it requires ‘significant cash’ ahead of its impending listing on the US stock exchange.

The private healthcare provider, which runs the largest NHS GP practice in England through its digital-first provider GP at Hand, is pursuing a merger that will mean it will become publicly listed on the New York Stock Exchange.

Babylon said this week that it expects the merger with publicly traded special purpose acquisition company (spac) Alkuri Global Acquisition Corp to complete ‘shortly after’ a shareholder meeting that took place yesterday. 

But a registration statement filed with the US Securities and Exchange Commission ahead of the merger, dated 30 September, said that it requires ‘significant cash resources’.

It said: ‘We require and will continue to need significant cash resources to, among other things, fund our working capital requirements, increase our headcount, make capital expenditures (including those related to product development), and expand our business through acquisitions.’

It added that if the merger does not take place, the company will need to ‘seek additional funding’ to ‘continue [its] operations’.

The document said: ‘There are material uncertainties (ability to fundraise further capital in the short term) related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern and therefore, to continue realising its assets and discharging its liabilities in the normal course of business.’

Due to a delay of ‘several months’ with the merger, Babylon was forced to take out a $15m loan to ‘address short-term cash flow needs’, it said.

The document added that Babylon made a loss of $75.8m in the six months up to 30 June 2021, leaving the company’s ‘cash and case equivalents’ totalling $42.4m as of 30 June.

In 2020 as a whole, Babylon reported a net loss of $188m, after losing $140.3m in 2019, it added.

Babylon announced earlier this month that it had secured a conditional investment of up to $200m to ‘fuel’ its ‘rapid growth plan’, meaning it will have access to ‘as much as $775 million of capital before fees’ following the planned merger.

Meanwhile, Babylon also announced this week that it will manage 55,000 new patients through its partnership with the Royal Wolverhampton NHS Trust alongside the 105,000 on its GP at Hand list.

Babylon founder and CEO Ali Parsa said: ‘This expansion of our work will help Babylon further our aim of reaching communities where access and affordability are obstacles, in order to make health equity the norm.

‘Our growth in value-based care further demonstrates the structural advantage of our digital-first model, which is scaling ahead of plan, all while maintaining high-quality healthcare.’

It comes as NHS England and the Government have set out a £250m ‘support’ package for GPs that sets out a range of measures to improve access to practices.

Babylon’s NHS arm GP at Hand became the first practice in England to register more than 100,000 patients on a single list in August.

Concerns have previously been raised around the safety Babylon’s digital GP offer, including by a doctor who was labelled a ‘troll’ by Babylon after he tested its AI app and reported the results on social media.

The provider has been accused by critics of ‘cherry-picking’ younger, healthier patients, leaving other practices to care for patients with greater needs. 

GP at Hand controversially enjoyed the endorsement of then-health secretary Matt Hancock when it launched in 2018.

Upon complaints from GPs, including the RCGP, Mr Hancock said it did not differ to other GP practices who are also ‘private’.

Meanwhile, Pulse revealed in June that NHSX and NHS England were considering the viability of a wider roll out of an artificial intelligence triage model based on that used by Babylon.

READERS' COMMENTS [11]

Turn out The Lights 21 October, 2021 6:23 pm

Creaky ship at Babylon ,just think the government has destabilised the functioning part of GP land to subsidize this model. They have sunk the good bit to prop up this mess .The irony being Babylon would not be used or recruit the Tory core grey vote. The last decade the Tories have been building with a pack or cards. Stand back and watch the ensuing carnage as it collapses.

Hello My name is 21 October, 2021 8:28 pm

Ignorant people who know nothing about health care.

Slobber Dog 21 October, 2021 8:34 pm

Schadenfreude.

Dr N 21 October, 2021 9:57 pm

Babygone

Simon Gilbert 21 October, 2021 10:49 pm

Justice for Dr Watkins!

Mr Marvellous 22 October, 2021 8:49 am

How much F2F is Babylon doing?

Patrufini Duffy 22 October, 2021 3:48 pm

This is all just too weird. And accepted by the UK public.
Keep distracting them with football, beer and Harry and Meghan – it’s working marvelously your ploy. And extract their data soon, and keep telling them about useless UK GPs – then siphon it all off backhanded. Superb, hats off really, hats off.

David Banner 22 October, 2021 5:39 pm

When Babylon introduced distant consultations rather than boring old F2F it all seemed so new, fresh, exciting…..the future.
Then the pandemic comes along, and we ALL do virtual consulting…..suddenly Babylon ain’t looking so unique.
And now it turns out that Joe Public hates it any way!
Sorry, Babylon, but you stormed the gates with huge government support and poached huge numbers of healthy young patients from already struggling practices. Now your USP has gone, and it’s time to face the financial music. I doubt many on here feel sorry for you….you live by the sword, you die by the sword.

Simon Gordon 23 October, 2021 12:03 am

While we have all been moaning about being a GP , Parsa has taken many concepts from the NHS, and sold them round the world. He’s now a billionaire…

David Mummery 26 October, 2021 10:38 am

https://m.facebook.com/medicspotuk/videos/2196603673921767/
Two Ronnies in 1985!! How prophetic!!

Nicholas Sharvill 27 October, 2021 6:42 pm

can someone explain why the financial pages suggest the founder of babylon is set to make $1 billion from the flotation despite the fact that if has always lost money just like circle did before>