News recently broke that Babylon Health has raised a new round of capital. The $550 million infusion is a multiple of the company’s previous capital events combined. Saudi Arabia’s Public Investment Fund participated in the financing.
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The round values the firm at more than $2 billion. Notably, the round itself and the unicorn-level valuation are not surprises. Media reports from earlier in the week detailed the impending investment and valuation. Forbes, for example, noted that a $1 billion valuation, new round, and money from Saudi Arabia would be present, all of which came true.
Babylon Health is most famous for its AI-powered health technology, including a chatbot used by the UK’s National Health Service (NHS). According to Babylon’s website, its NHS chatbot can help British citizens book appointments, manage prescriptions, find clinics, and more. The same webpage claims that “[o]ver 50,000 people already have GP at hand as their NHS GP,” implying that the software has attracted meaningful, if minority-share, use among the country’s population.
That Babylon Health was able to raise so much money in a single piece isn’t shocking. Healthtech is having a good moment with several players in the space going public, for example (more here on Livongo, and here on Phreesia). And, it isn’t rare in the Vision Fund era for a company to raise an outsized round in one go, provided that its new backers are confident enough in its ability to execute effectively from a vastly larger capital base.
Before Babylon Health raised its new capital, the UK-based healthtech company had raised just two known rounds: A $25 million 2016 Series A, and a £47 million 2017 Series B. The company’s Series C is therefore 6.5 times the amount of money that it had raised before.
In chart terms, Babylon Health’s capital history looks like this:
The money behind that round, the Saudi PIF, is tipped to take part in the impending Vision Fund 2. Recall that Saudi capital was key (and controversial) in powering the Vision Fund 1. The country is therefore not stopping its huge bets on modern technology companies.
Given that, expect more rounds of this sort to crop up before the eventual correction comes.
Illustration: Li-Anne Dias.