Babylon Health, once the 'future of the NHS', goes into administration
The UK AI health company touted by Matt Hancock was delisted by the New York Stock Exchange last month and has now called in the administrators
Babylon Health, the UK AI firm promoted as the future of the NHS by former health secretary Matt Hancock, has entered UK administration just two years after a high-profile listing on the New York Stock Exchange.
Babylon Health was delisted from the NYSE last month and is now facing collapse, after losing nearly all of its $4.2 billion valuation. The company's demise comes amid allegations of overhyped technology, questionable ties to the Conservative Party, and terminated contracts with UK hospitals.
Founded in 2013 by former UK Iranian banker Ali Parsa, Babylon claimed its AI could revolutionise healthcare through virtual appointments and diagnostic chatbots such as its GP at Hand, which it claims has 100,000 users in the UK. However, experts repeatedly warned the technology was unproven and overhyped.
Nevertheless, Babylon, which is registered in Jersey, won a number of NHS contracts, thanks in part to Hancock's promotion of GP at Hand in 2018.
Later, it was revealed that Babylon shareholders had donated £200,000 to the Conservative Party and Hancock's own leadership campaign in 2017 and 2018.
Hancock had said he wanted to see Babylon's digital first primary care service rolled out across the country. However, last August two NHS Trusts that had pioneered the system, Royal Wolverhampton NHS Trust and University Hospitals Birmingham NHS Foundation Trust said they were ending their multi-year contract with Babylon just two years after signing the deal.
Hammersmith and Fulham NHS Trust reportedly continues to operate the system.
Babylon went public in New York in 2021 at a $4.2 billion valuation, making Parsa a billionaire. But following the loss of Wolverhampton and Birmingham trusts, the company's share price fell by 85%.
In July 2023, in the face of continuing financial problems, Babylon was delisted from the NYSE. This month it announced that London-based investment firm AlbaCore Capital would take over its assets without shareholders' approval, and that it was calling in administrators in the UK.
In a statement on its website published 7th August, the company said it was in discussions to seek additional funding.
"Following Babylon's receipt of funding under its amended bridge notes facility with AlbaCore, Babylon has no binding commitment for additional financing to continue its business operations," the statement said.
"As a result, the Group is exploring new strategic alternatives in order to find the best possible outcome for its UK business," it continued.
"Babylon remains focused on continuing the day-to-day operations of its UK business, providing accessibility of its healthcare services and the highest standards of care for its patients and members. The Group is pursuing the divestiture of its UK business to third parties that may provide financing to assure the continuity of the operations."
The potential for AI to speed diagnostics and identify disease has long been touted as a primary use case for the technology, but while it is doubtless improving and can outperform human specialists in some areas, results have been patchy, occasionally producing false positives, false negatives and unpredictable outcomes.
With the current levels of AI hype, Babylon's rapid fall from grace serves as a cautionary tale about the risks of overpromising untested healthcare technology, and of murky political lobbying.
Two years after the blockbuster IPO that made its founder a billionaire, Babylon Health now faces bankruptcy and lawsuits from aggrieved investors.
In an email to Computing a Babylon Health spokesperson said: "We want to emphasise that there will be no impact to the services we provide to our NHS GP at Hand, Direct-to-Consumer or Private patients and members. We will continue to uphold the highest standards of care and service for our patients and members."