Behind the fall of a telehealth "unicorn"

Babylon Health, a London-based telehealth provider, agreed to sell most of its assets to U.S.-based eMed via a bankruptcy process.

The big picture: This was a lot like the recent film "Babylon." Big stars. Bigger expectations. Total flop.

Backstory: Babylon once was valued at nearly $2 billion by its venture capital backers, including Saudi PIF and DeepMind Technologies. In the fall of 2021 it went public on the NYSE via a SPAC led by former Groupon CEO Rich Williams, with the original deal implying a $4.2 billion valuation.

• Then things turned south. Babylon Health lost a couple major National Health Services contracts, its losses grew and its shares cratered like so many other members of the blank check chum club.
• Babylon Health in June agreed to be taken private by VC-backed MindMaze, but that deal died without explanation. In early August it shut its U.S. operations, based in Texas, and filed for Chapter 7 bankruptcy protection.
• This week the company put its remaining U.K. assets into administration, setting up the sale to eMed.

The bottom line: Babylon grew on the back of easy VC dollars and buzzwords like "digital-first" and "value-based care."

• But eventually the bills come due and a business model must prove profitable. That was too tall a tower for Babylon to scale.