AI chatbot maker Babylon Health rides SPAC wave

Babylon Health announced Thursday that it plans to go public via a $4.2-billion merger with special purpose acquisition company (SPAC) Alkuri Global. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second half of this year.

Ali Parsa, CEO of Babylon, said "we have achieved one of the highest growth rates every year since our inception, with consistently high clinical outcomes and patient satisfaction. Becoming a public company is just another step in our journey." Parsa, who will continue in his roles as CEO and board chairman, added "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 healthcare."

The deal follows speculation earlier this year that Babylon was exploring options to go public with a listing that could value the company at more than $4 billion. According to the sources at that time, Babylon had been approached by several SPACs about going public via a merger.

Scaling up operations

Babylon said the capital raised through the transaction will allow it to continue to expand its services. The telehealth company's offerings include its Babylon 360 value-based care service, which combines AI-powered technology with human medical expertise, as well as Babylon Cloud Services, a suite of digital self-care tools. Taken together, Babylon says those services cover 24 million people across the US, Canada, Europe, Africa and 13 countries in Asia, with the company now focused "on building on this momentum by rapidly scaling operations."

The deal with will provide up to $575 million in gross proceeds to Babylon, including $230 million in private placement from investors such as Palantir Technologies. Meanwhile, Kinnevik said it would contribute $5 million as part of the private placement, bringing its ownership after the transaction closes to 13%. Overall, existing Babylon shareholders will own around 84% of the pro forma company at closing. 

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