It’s been two years since I last sat across from Ali Parsa at a cafe for brunch. Back then, less than 12 months had passed since a disastrous SPAC left his healthtech company Babylon with a $300m hole in its finances.
Sure, things were rocky, but Parsa cut a typically bullish figure that day. “Watch this space,” he told me with a grin as he got up to leave. “I wouldn’t be too worried about us.”
By the following September, Babylon — valued at $4.2bn at its peak — had delisted, botched a merger, collapsed and been sold off for parts. Investors lost hundreds of millions of dollars and hundreds of employees lost their jobs. It was “devastating”, Parsa tells me — the “hardest” period of his career. He went to ground and spent a year out of the public eye, away from the events circuit and social media.
Now the enigmatic founder’s back — with a new startup, new investors and a new pair of specs.
His new venture, Quadrivia, which emerged from stealth last month, is building a “comprehensive AI assistant that does every aspect of healthcare”. It’s got the potential to be “significantly” bigger than Babylon, says Parsa.
Considering the company made north of a billion dollars in revenue in its last full year of trading, that’s some ambition. But, perhaps, no less than you’d expect.
New look
Parsa arrives at Where’s Fred — a quiet cafe nestled down a side street near St Paul’s, in London — at a brisk pace, a few minutes late.
I’ve managed to bag a slot in his busy schedule between two meetings. The brief for a meeting place from Parsa’s PA was simple: good coffee, good food and somewhere in the city. I’ve never been to Where’s Fred before so I can only guarantee the latter.
“What can I get you?” he asks before he’s sat down. We’re on stools around a small table next to the counter and I can’t help feeling Parsa might be used to fancier brunch spots. He’s wearing a navy double-breasted jacket, an extremely white shirt and jeans.
And he’s got a new pair of glasses: thick-rimmed round tortoiseshell have made way for a square-framed translucent red specs.
Parsa takes a brief glance over the menu before deciding on the first item on the page — avocado on toast. I get the feeling he’s in a rush. The waiter arrives to take our order and Parsa does the talking: item number one for him and burrata with confit tomatoes on toast for me.
The fall of Babylon
With food ordered, we begin where we left off last time: the period after Babylon’s disastrous SPAC. “What we thought was the pinnacle of success was actually the genesis of our failure,” he tells me.
The company — which had had a meteoric rise until the listing, wowing investors with its slick digital-first GP practices and AI chatbot and raising an eye-watering $550m round in 2019, still a record for a European healthtech — was left scrambling to plug the gaping hole in its finances. Despite cutting headcount, abandoning contracts, and trying to raise more cash from investors, it didn’t succeed.
What I know is that of all the things we were doing, we should have done less
“We did a huge amount of reflection,” he tells me. “The thing I learned with the benefit of hindsight is that going fast really matters [as a startup] but you also need to have focus.”
By 2019, the company had operations in the US, the UK, a number of countries in Asia and Rwanda. “When the US started taking off so fast, we should’ve put all of our focus in the US.”
By 2022, the US was responsible for the vast majority of Babylon’s $1.1bn revenue. In the UK, however, the company lost money on every patient, Parsa has previously said.
“I perhaps didn’t have the heart that a more brutal entrepreneur would have had to shut down the business,” he tells me. “What I know is that of all the things we were doing, we should have done less.”
I’m beginning to get the impression these are well-rehearsed learnings. It’s not surprising considering he’s been fielding (presumably pointed) questions from potential investors about why his new startup won’t lose them money for the best part of a year.
The importance of control
Parsa also says he learned the “importance of control”. It seems unlikely this is a radical new lesson for him — Parsa was a solo founder at Circle, his first health company, and at Babylon for the nine years prior to its collapse — but I can see how Babylon’s end would’ve cemented the thinking.
I don’t think it was incidental that we lost the company within six months of losing control of the board
In spring 2023, Babylon’s debt funder Albacore Capital — which had pumped more than $300m into the business following the botched SPAC — took control of the company’s board. Parsa was removed as a director and Albacore delisted the company — wiping stakes other shareholders had paid more than $600m for — and engineered a merger which eventually collapsed.
“I don’t think it was incidental that we lost the company within six months of losing control of the board,” he tells me.
Albacore pulled the proposed merger with another of its portfolio companies, Swiss digital therapeutics platform Mindmaze, at the “very last second”, Parsa says, adding that the debt funder wasn’t “operational” enough to figure out that it wasn’t going to work sooner.
Parsa thinks he could’ve found a way to buy the business back from the debt funder had they pulled the merger a month earlier. “We [would’ve] had a month of time to buy the business. I had all my clients who wanted to buy it back with me.” But time ran out, and UK healthcare provider EMed stepped in to buy the business — for a reported $6.3m — a few weeks later.
The Babylon founder talks about all of this in a matter of fact tone — and he says he’s not angry about how things went down. “When things go wrong in the market [all the different shareholders] have their own problems.”
The food arrives at our table. Parsa says “thank you” to the waiter twice — and I awkwardly take a photo of the plates. Parsa waits for me to put my phone down and carries on.
“There’s an old Chinese saying: when you’re young, you blame everybody else. When you’re older, you blame yourself and eventually you blame no one,” he says, embodying a sage old monk for a moment. In spite of my cynical reporter’s mind, I believe him.
The media and criticism
Despite all that, “every aspect” of Babylon failing was “devastating”, he says. “People I knew really well lost their livelihoods, their jobs.”
It impacted his family life too. He says that a journalist “wrote fictions” — before quickly adding it wasn’t me. “Your children are reading those fictions, the friends of your children are reading them. [There’s] an effect on [your children], on their mental health, the way they feel — even though they knew it was a lie.”
While Parsa’s fairly stoic about the way Babylon collapsed, it’s not hard to see that he feels much of the media coverage surrounding the story was unfair.
“When we lost Babylon, a great entrepreneur called me and said, ‘you’re going to get a lot of criticism, but I will bet you $1,000 that you will not get a single criticism from people who’ve done more than you’,” he says — before turning to my reporting.
Nine former senior employees told me in October 2023 that Babylon — while led by a visionary leader — faced technical, cultural and commercial challenges as the company tried to scale. Parsa couldn’t be reached for comment for my article at the time; he says his lawyers told him to focus on “making sure we do our best, not to tell our story”.
“You reached out to hundreds of employees”, he says (it was more like dozens). “About nine came back to you. Why didn’t hundreds? Because they knew how complex it was. And if you look at the ones that did come back, how many of them [worked for Babylon for] a long time?”
The majority of employees I spoke with worked at Babylon for some time, I say. Parsa quickly moves the conversation along. “My point is not that, my point is that my greatest, most senior people, they’re all still huge friends,” he says.
“It’s super easy in life to criticise, right? You always get somebody who just thinks they know better, but you look at their CV and, I mean no disrespect, but they haven’t had to go through that journey and understand how hard it is.”
I’m not one to sit down, lick my wounds, blame the world. I’m one that keeps going
I ask Parsa if he thought my article was inaccurate. “I don’t remember your article to be honest,” he says — although he does claim to remember how many employees I’d reached out to for that article, I think to myself.
Moving on
There were just a couple of months between the collapse of Babylon and Parsa registering Quadrivia in Jersey.
“I’m not one to sit down, lick my wounds, blame the world. I’m one that keeps going,” he says, before adding “not keeping going is a privilege”. Surely he’s done well enough financially in his career to not keep going, though?
“Financially is irrelevant,” Parsa says. “Financially even before Babylon I could retire. Years of investment banking and then building the largest [private] hospital group in the country, you do okay. That’s not the reason why you do this.”
Quadrivia is building an AI assistant, which it’s calling “Qu”, for clinicians that help with admin tasks, patient interactions, decision-making, chronic and post-operative care and continuous monitoring, in multiple languages. It launched in beta last month.
“What we’re trying to build is a comprehensive AI assistant that does every aspect of healthcare,” says Parsa. It’s the kind of big vision the founder has become known for — though it’s still very early days.
Saying Babylon failed because the IPO was a disaster is simply not true. It failed for multiple reasons
Quadrivia is still working out which customers to target initially, but it could sell into provider and payor organisations (which can typically include public healthcare systems, insurers and private healthcare providers), pharmaceutical companies, pharmacy chains and other startups, says Parsa.
Those customers could end up being from anywhere in the world, he adds — before shifting focus back to Babylon. It feels like he wants to set the record straight.
“You’re more interested in Babylon,” he tells me. (I don’t point out that he was the one who changed the subject.) “The problem with [covering] Babylon in a very headline seeking way is that it doesn’t teach anything to anybody. Saying Babylon failed because the IPO was a disaster is simply not true. It failed for multiple reasons.”
What should my headline be for this article, I ask him. “Your headline will be whatever your editors think will get most clicks — it’s like any business. But the headline that I think will be most valued is the one that says you can fall, it’s not your choice when you fall, but it is your choice whether you get up or not.”
Fundraising roadshow
We’ve got about 15 minutes left before Parsa’s got to dash to his next meeting, and I want to know how conversations with investors this time around went. Quadrivia has raised an undisclosed amount — which Parsa says is less than $10m when I press him on the figure — from Swedish impact VC Norrsken and other unnamed investors.
While Parsa says he was inundated with approaches from investors, when prompted he concedes that there was an element of skepticism from potential backers.
What were they skeptical about? “Most people are too polite to tell you, I guess, so I don’t know, you’d have to ask them,” he replies. I get the feeling he’s not being entirely candid with me — investors aren’t known for being coy during pitches. I ask again.
I actually think Quadrivia has the potential to be significantly larger than Babylon
“People want to know what lessons you learned,” Parsa tells me. “The greatest investors never buy the BS when somebody says, ‘it’s all because of me’. But they also don’t buy the BS when they say ‘it’s all because of him’.”
I ask a couple more questions about when Parsa thinks Quadrivia will be profitable — “very quickly”, he responds vaguely.
“I actually think Quadrivia has the potential to be significantly larger than Babylon,” he says. “It’s not the salesperson in me saying it, it’s because it’s solving [a big problem].” That sounds a little like the salesperson in you, I think.
Crowded market
There are a lot of people building what you’re building, I say. In 2023, Denmark’s Corti raised $60m and earlier this year France’s Nabla picked up $24m — both are also building for an AI assistant for doctors and nurses. Sweden’s Tandem Health raised $9.5m to scale its healthcare copilot in June.
Parsa disagrees. “I read your article, I think you’re wrong,” he says. “I’m Iranian and friends of mine look at me and say ‘you Iranians all look the same’. But to me, we don’t, we look very different. And I think it’s the same with AI.”
Quadrivia’s clinical copilot, he argues, will be more “comprehensive” than the competition. “It doesn’t just understand medicine, it doesn’t just understand your clinical records, it can take clinical history, it can form hypotheses, it can recommend what investigations [a clinician] needs to do, it can recommend who’s the best doctor for that investigation,” he says.
With the product still in beta, “it can” seems a little like the natural salesperson in Parsa coming out again. (When the startup emerged from stealth, it said in a press release: “Qu is still in its infancy and while developing fast, needs further improvements before deployment.”)
There’s room for multiple players in the healthcare AI market, says Parsa. The global healthcare market is worth $10tn and about $1tn of that is addressable, he says, which means if Quadrivia gets to the size of Babylon, it’s still only tapping one thousandth of the market.
“I hope Nabla gets another of the thousandth — and somebody else gets another,” he says. “These guys are not our competitors, they’re our peers. Our competitor is the existing system. Immature entrepreneurs think they’re competing.”
What Quadrivia won’t do, at least for now, is diagnoses — which Parsa says is a “regulatory challenge” — though it will recommend diagnoses to doctors. The AI assistant will also be “highly customisable”, says Parsa, which means clinicians decide, for example, what questions the copilot will ask a patient during a triage process. “Then it’s highly controllable. The safety is entirely for the doctor to decide.”
Deja vu
As Parsa’s waxing lyrical about his new venture, it’s hard to ignore the feeling that we’ve been here before.
The product — a healthcare tool using AI to help doctors make diagnoses and treat patients — is remarkably similar to Babylon in some ways. The team working on it has strong Babylon DNA too. Of the around 10 people who work for Quadrivia, the vast majority are ex-Babylon.
“I don’t see [Quadrivia and Babylon] as separate,” Parsa told a podcast last month. “We’ve been together for years trying to solve this problem. One of our costumes has changed, but the brain and the body are the same.”
And when talking about Quadrivia — like with Babylon — Parsa has a knack of sweeping you up in the story. “You’re a journalist, if I came to you and said ‘here is an AI assistant that helps you with everything’, you’d love it.” Yes, I say, enthusiastically.
Some things are different, though.
Parsa says he would “never” raise a megaround from VCs again. “I believe if your company is going to do really well, your customers will pay for it. In Babylon, most of the money we have was paid by our customers, right? Our collective revenue far outstripped our collective investment.”
And there’s another key difference — Quadrivia won’t be selling healthcare services (providing personnel to directly treat patients). “What was really hard [at Babylon] was the service provision,” he says. “If we were a technology-only company at Babylon, we could have sold out technology everywhere without any issues.” It was the services arm of the business that employed 90% of Babylon’s employees, he adds.
While Parsa’s vague on timelines around product release and path to profitability, Quadrivia will get as big as Babylon, faster, “because we learned a lot”, he says.
I’m a guy who works 12 hours a day
Whether that happens remains to be seen, but while things didn’t work out at Babylon, few would bet against him scaling a startup again — not least because of his world-class ability to tell a compelling story and sell.
Time is up, but just before we head our separate ways I want to ask something that’s been playing on my mind for months.
Parsa was scheduled to speak at HLTH — an event in Amsterdam — in June, in what would’ve been his first public appearance since the collapse of Babylon. Healthtech circles were full of excited chatter about what he might be working on in the run-up, but he pulled out a week before the event. Why?
“All my focus was on Quadrivia and it became clear [HLTH] was a distraction,” Parsa says. “If I go to a conference, I see a lot of good friends, I pamper my ego by being on stage — but I’m taking away from the work I have to do. I’m a guy who works 12 hours a day.”
I don’t doubt it, I think, as Parsa rushes off to his next meeting.
Read the orginal article: https://sifted.eu/articles/ali-parsa-brunch-babylon-quadrivia/
