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London health tech startup Babylon Health to go public via £2.98B merger with blank check company

Babylon Health

SPACs (Special Purpose Acquisition Companies) have boomed in Europe in recent years. It is one of the easiest and hottest ways for young companies to go public quickly and rake in some money for growth. 

According to the JP Morgan report, half of all new IPOs by volume since January 2019 were SPACs. 

Babylon to go public

In this regard, London-based health tech startup Babylon has announced its plan to go public by merging with Alkuri Global Acquisition Corp. (NASDAQ: KURI) (“Alkuri Global”), a special purpose acquisition company. 

Alkuri Global CEO Rich Williams. “When we founded Alkuri, we set out to identify high-potential, disruptive companies with visionary founders and strong teams. Babylon is all of those things, and we’re excited to work with them on their truly world-changing mission.”

The transaction reflects an initial pro forma equity value of approximately $4.2 billion (approx £2.98 billion). The transaction is expected to close in the second half of 2021. Babylon will be listed on Nasdaq under the ticker “BBLN”.

Dr. Ali Parsa, Founder and CEO of Babylon, comments, “Becoming a public company is just another step in our journey. We are at the very beginning of our work to re-imagine our sector, to make it digital-first and prevention-first and shift the focus away from sick care to true health care.”

Babylon Health will use the funding to expand its services both with existing and new customers.

What is SPAC?

SPAC is an alternative way for companies to go public that differs from a traditional initial public offering (IPO) in its process, speed, disclosure, and regulatory requirements.

Digital health service provider

Founded in 2013 by Ali Parsa, Babylon is a digital health service provider that combines AI technology with the medical expertise of humans. 

Parsa, says, “We founded Babylon on a fundamental belief, that it is possible to make quality healthcare accessible and affordable for every person on earth by combining the latest in technology and the best in medical expertise. We have achieved one of the highest growth rates every year since our inception, with consistently high clinical outcomes and patient satisfaction.” 

The UK company delivers full access to healthcare, including personalized health assessments, treatment advice, and face-to-face appointments with a doctor 24/7. 

Two primary channels

At present, the company helps patients through two primary channels,  

Babylon 360 – Its digital-first value-based care service 

Babylon Cloud Services – It is a suite of digital self-care tools that enables patients and clinicians to gain insights and information either through Babylon directly or through Babylon’s roster of top-tier partners. 

The company has scaled at c.5x annual revenue growth in 2020 and is expected to grow by c.4x in 2021. 

One patient every five seconds

In 2020, the company helped one patient every five seconds with approximately 6 million patient interactions. The company’s service covers over 24 million people across the United States, Canada, Europe, Africa, and 13 countries in Asia. 

The deal with Alkuri Global Acquisition Corp will provide up to $575 million (approx £407 million) in gross proceeds to Babylon, including $230 million (approx £163 million) private placement from investors such as AMF Pensionsförsäkring and Swedbank Robur with strategic investor Palantir. 

The transaction, which has been unanimously approved by the Boards of Directors of both Babylon and Alkuri Global, is expected to close in the second half of 2021, subject to approval by Alkuri Global’s stockholders and other customary closing conditions, including any applicable regulatory approvals. 

To date, the company has raised €877 million (approx £754 million) in funding from investors.