Digital health service provider Babylon Health and the NHS have terminated multi-year contracts in the UK due to “challenging global and macroeconomic conditions”.
Babylon Health has reached an agreement to end its 10-year partnership with the Royal Wolverhampton NHS Trust just two years after penning the deal.
The British health tech company has also ceased its contract with University Hospitals Birmingham NHS Foundation Trust, a deal that spans back to 2019.
Speaking to TechCrunch, Tim Rideout, UK general manager at Babylon Health, said: “I think you’ll see this across the NHS with a lot of different private companies now — the economics of the contract were really tight because of the funding pressures that the NHS is under.
“And those funding pressures have just grown since we entered into the partnership. And then, for us, capital is becoming more expensive.”
This is despite Babylon Health publishing “strong performance with record margins” results for the second quarter of this year yesterday.
Babylon saw total revenue reach $265.4m (£219.4m) a 4.6x year-over-year growth from $57.5m (£47.5m).
Commenting on the results, Ali Parsa, CEO and founder, Babylon said: “Babylon has once again delivered very strong results that demonstrate our continued momentum.”
However, Babylon is showing no sign of slowing down its operations, at the time of writing the health tech had 68 job openings advertised through Linkedin.
It comes after the firm went public last year through a £2.98bn special purpose acquisition company.
Shares for the company since the listing have slumped from $9.87 to $0.90 and they are down by 85.6% since the start of the year.
Babylon has previously been supported by former health secretary Matt Hancock. It was found that shareholders at Babylon Health made donations to Hancock and the Conservative party.
Founded by Ali Parsa in 2013, Babylon’s app helps patients identify illnesses, video call clinicians and monitor their health. According to Crunchbase it has total funding of $1.1bn (£909.2m).
The terminated contracts were first reported by the Health Service Journal.