Sep 4, 2023 - Economy

Behind the fall of a telehealth "unicorn"

Dan Primack

Illustration of a red cross-shaped balloon inflating and then popping. — Illustration: Brendan Lynch/Axios

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.

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Behind the fall of a telehealth "unicorn"

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