Telehealth vendor Babylon confirmed its rumored public debut: The company will go public through a $4.2 billion SPAC merger with Alkuri Global Acquisition Corp., which is expected to close by the end of this year. Babylon’s services (like its suite of digital triage and telehealth tools) cover approximately 24 million worldwide users, including individuals in the US, Europe, and Asia.
SPAC deals give companies more control over public opinion than a traditional IPO—which bodes well for a company like Babylon that’s come under public fire in the past.
- Companies are legally prohibited from publicly forecasting their financial earnings with an IPO—but these same conditions don’t apply under a SPAC deal. A SPAC deal gives companies like Babylon an opportunity to boast rosy financial projections: For example, Babylon reported $79 million in 2020 revenues (a 394% annual increase)—and it expects that figure to swell to $321 million this year.
- Babylon doesn’t have the squeakiest cybersecurity track record—so, the opportunity to abate any additional public scrutiny could be helpful. For example, last year, Babylon’s software error allowed some users to view recordings of other patients’ virtual visits; and in February 2020, Babylon was in hot water for posting details of a physician critic's in-app search results on Twitter. However, the company has since then heightened security transparency on its site, indicating it takes consumers’ “data security extremely seriously.”
Telehealth companies with built-in, AI-powered triage tools are gaining steam among large US hospitals—making now an opportune time for Babylon to make a splash on the public market.
- Chatbot-based telehealth cos have been inking deals with major US health systems over the last year. For example, last year, Babylon teamed up with Mount Sinai to launch AI-powered diagnosis and telehealth services for millions of New Yorkers. And AI-generated symptom checker app Buoy Health is teamed up with Boston’s Children’s Hospital to identify potential causes of pediatric symptoms to guide parents to the correct mode of care.
- Hospitals’ interest makes sense, considering triage chabots can steer patients away from costly, unnecessary ED visits. Symptoms checker helped decrease patients’ uncertainty about health concerns—34% of patients felt uncertain about their health before using chatbot tools, but that dropped to 21% afterwards, according to data published last year in JAMA. Further, over 32% of users said diagnostic chatbots reduced the “urgency” of their intended level of care (like going to the emergency department). Easing patients’ concerns prior to visiting the ED should go a long way to cutting health systems’ costs: The US collectively spends up to $8.3 billion annually on preventable ED visits.