Bankruptcy filings reveal that investors have been left with hundreds of millions of dollars of losses after the British telehealth startup, which was founded by Ali Parsa, had sold its U.K. arm for around $620,000.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 .
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.
The estimates of the total assets available for Babylon’s U.K.-based holding company are $35.2 million , while its liabilities total more than $378.4 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. 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.
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