Babylon Health virtual GP app faces cash crunch
The company behind a virtual GP app championed by Matt Hancock is facing a cash crunch within months as it races to secure new investment and sell off assets.
Babylon Health has raised around two months' worth of working capital after securing a $30m (£24.5m) bridging loan from London-based lender AlbaCore Capital, accounts filed with Companies House reveal.
The New York-listed company had around four months of cash in the bank at the end of 2022, based on operating costs of around $19m a month.
The figures suggest Babylon could have as little as three months worth of cash in the bank.
A Babylon spokesman did not dispute the operating expenses figures.
AlbaCore previously invested $200m (£163.6m) into the healthcare company in 2021.
Loss-making Babylon, which lets patients hold video consultations with doctors, has been racing to sell off its US business in an effort to slim down costs and raise cash.
The company’s chief financial officer said investors had approached it during the marketing process and Babylon was now assessing its options.
David Humphreys told The Telegraph: "Late last year we announced plans to sell Meritage Medical Network... in order to fully finance Babylon to profitability.
“After starting this process, we have been approached by potential investors who have suggested other strategic alternatives, some of which would include retaining the IPA Business.”
Mr Humphreys did not name the potential investors. He blamed a "shortfall from the Spac funding," for the company’s financial situation.
Babylon went public in the US in 2021 by merging with a Special Purpose Acquisition Company, or SPAC, run by former Groupon executives. The deal initially valued Babylon at $4.2bn but shares have collapsed over 90pc since then, leaving the company worth just $154m by Friday.
Babylon's Iranian-born chief executive Ali Parsa has previously described the company’s float as an “unmitigated disaster” and “a very big mistake”.
Mr Parsa suggested in February that Babylon would reach profitability somewhere in 2025.
Meritage IPA was put up for sale last October. The company's annual results suggest that health monitoring start-up Higi, acquired by Babylon in 2020, may be next in line for sale. A spokesman declined to comment.
Founded in 2013 in London, Babylon signed deals with the NHS and was championed by Mr Hancock while he was health secretary. He called the company’s GP At Hand video consultation service, which is used by around 100,000 NHS patients across Britain, “revolutionary”.
Last August the company terminated several NHS contracts after describing the work as “not economically viable”.
Mr Parsa has said the company loses money on every NHS GP patient it serves.