A virtual GP appointments app used by the NHS has announced a £3bn US stock market listing after agreeing to a blank-cheque company merger that will net its British-Iranian founder almost £1bn.
Babylon’s reverse merger with Alkuri Global, a New York-listed special-purpose acquisition company (Spac), makes it the latest firm to take advantage of a growing Spac trend that makes it cheaper for private companies to go public.
Babylon’s chief executive, Ali Parsa, a former Goldman Sachs investment banker, will retain a near-30% stake in the business worth an estimated $1.2bn (£850m), adding him to the growing list of technology billionaires.
Babylon is likely to raise $230m from the deal, through investors including the American big data firm Palantir, which was founded by the rightwing billionaire Peter Thiel. The deal is expected to be finalised by the end of the year.
Parsa is also the founder of Circle, which was the first private healthcare company to run an NHS hospital in 2012. It was subsequently forced to hand back the hospital – the Hinchingbrooke in Cambridgeshire – three years later because of financial problems and rising demand that led to what inspectors said was “inadequate” service.
Babylon, a Chelsea-based firm that launched in 2013, is an app-based service that offers patients unlimited private GP consultations for £149 a year or one-off appointments for £49. Patients can gain instant access to doctors via video-call consultations 24 hours a day, seven days a week, including bank holidays. The firm also offers appointments with therapists and specialists from £39.
Babylon has an agreement with the NHS to provide GP appointments and services, online and in person, to more than 90,000 patients. However, the majority of its business is in the US, where it has about 3.5 million customers. Babylon has roughly 2.5 million UK clients.
The decision to float Babylon in the US will be another blow for the London Stock Exchange, which is struggling to convince UK startups to list on their home turf. The government is racing to update local listing rules to make London a more attractive place for startups and high-growth companies to float.