The digital health company Babylon has gone public through a special purpose acquisition corporation merger valued at $460 million, the organization announced Friday.
The AI-powered telehealth software joined Alkuri Global Acquisition Corp., one of a recent string of SPAC-led healthcare deals that raise money through initial public offerings and, within two years, spend that money acquiring other companies and taking them public. Babylon received $460 million, prior to transaction expenses, which includes cash proceeds from Alkuri and private placement investors.
"We aim to transform this reactive model of sick care to a proactive healthcare service that works to keep people at the peak of their health," Babylon CEO Dr. Ali Parsa wrote in a blog post to its shareholders.
Here are five things to know about Babylon and the transaction:
1. Babylon, which offers diagnoses and video appointments for more than 24 million people across 16 countries, aims to boost access to care and reduce costs by avoiding emergency department and urgent care visits. Its revenue grew 472% through the first half of 2021, up to $128.8 million, as the London-based startup steadily expands throughout the U.S. Through a combination of its value-based care model, telehealth service and primary care work, Babylon will be managing 350,000 patients on a capitated budget by the start of 2022, the company said.
2. More privately held health tech companies are turning to SPACs to go public. The acquisition companies aim to cash in on the growing the telehealth and mobile health app subsectors within digital health, which raised $6.6 billion and $2.3 billion, respectively, in the first three quarters of 2021, according to data from Digital Health Business and Technology.
3. Babylon's digital-first model in the UK delivered 15% to 35% lower hospital care costs than the regional average, according to peer-reviewed research commissioned by Babylon and published in the Journal of Medical Internet Research. The study compared spending for Babylon GP at Hand to the regional average in North West London from April 1, 2018 to March 31, 2019.
4. Nearly half of its consultations are performed without any human interaction, Parsa wrote in the blog. The company has aggregated more than 80 billion data points via 100 different sources since it was founded in 2013.
5. Parsa will continue to lead the company alongside Charlie Steel, chief financial officer; Stacy Saal, chief operations officer; Paul-Henri Ferrand, chief business officer; Dr. Darshak Sanghavi, chief medical officer; Steve Davis, chief technology officer; and Yon Nuta, chief product officer.