British tech start-up Babylon is raising $550 million at a $2 billion valuation. The company is behind the GP at Hand app which provides live smartphone based consultations with doctors and already has contracts with the NHS, Samsung, Tencent and insurer Prudential. The funding round, if successfully closed, would be one of the largest ever achieved by a British start-up.
Babylon has said that $450 million of the $550 million target is already secured. The investors to have committed the funds are reported as being the Public Investment Fund of Saudi Arabia, insurer Munich RE and an as yet unnamed U.S. healthcare company. Earlier investors such as the VC funds Kinnevik and Vostok New Ventures will also up their exposure to GP at Hand, which is still loss making and Babylon are said to be confident of being able to “shortly” confirm the remaining $100 million sought has been secured.
Babylon is six years old and GP at Hand is its flagship product. The start-up is also working on AI tools for the diagnosis and treatment of illnesses and conditions. The Chelsea-based company already has 1500 employees.
The NHS is already providing GP consultations, which users can replay at their convenience if they need a reminder of advice given, via the app, as are Prudential across location in Asia.
Despite its early success, GP at Hand has not escaped controversy. Health secretary Matt Hancock was last year criticised for endorsing Babylon in a sponsored newspaper feature that was paid for by the company. The London Borough of Hammersmith and Fulham overshot its NHS budget by £21 million after it started testing the GP at Hand app as a result of a flood of sign-ups from patients from outside of its catchment area.
Concerns have also been raised that the likelihood is the app will attract ‘younger and healthier’ patients, leaving local GP surgeries to pick up the usually significantly higher cost of treating older and more infirm patients who are unlikely to embrace the technology. And not all doctors are convinced that streamed consultations and AI-powered diagnostics tools will prove to offer the same levels of accuracy as in-person examinations.
Despite those criticisms and concerns, new technologies like that represented by GP at Hand are seen as key to the future of the NHS – helping it provide a high quality service to a growing and ageing population within a tight budget. Being able to avoid the loss of time involved in travelling to and waiting at GP surgeries is also a major bonus for many NHS patients.
Babylon’s diagnostics software showed 80% accuracy during a recent study, which the company says put it on par with a sample of doctors. The $550 million investment is intended to be split between funding further development of the company’s diagnostics AI as well as accelerating international expansion.
Founder Ali Parsa, a former Goldman Sachs banker who also founded Circle, the first private company to run an NHS hospital, commented:
“Chronic conditions are an increasing burden to affordability of healthcare across the globe. We have seen significant demand from partners across the US and Asia. While the burden of healthcare is global, the solutions have to be localised to meet the specific needs and culture of each country.”