Venture capital, the fetish of artificial intelligence, and the contradictions of making intangible assets

Figures & data

Figure 1 Processes of financial and real valorization in venture capital.

Source: Author’s analysis

Figure 2 Babylon’s venture capital driven process of making intangible assets.

Source: Author’s analysis based on data from financial reports and filings of UK subsidiaries, the Form 20-F and Form 10-K filings of Babylon Holdings Ltd, company announcements, and investor reports

Figure 3 Babylon’s intangible assets in-the-making and strategies of exploitation and appropriation.

Source: Author’s analysis

Table 1 Babylon Health’s disclosed financials

Fiscal year (numbers in US$ ‘000)	2017	2018	2019	2020	2021	2022
Revenues	2,333	7,549	16,034.0	79,272.0	320,827.0	1,109,669.0
Geographies
US	NA	NA	0	32,689	230,614	1,044,008
UK	NA	NA	12,189	28,827	35,490	41,471
ROW	NA	NA	3,845	17,756	54,723	24,190
Strategies of exploitation and appropriation
Value-based care	NA	NA	0	26,038	218,758	1,026,251
Software licensing	NA	NA	2,002	24,603	60,052	28,938
Fee-for-Service	NA	NA	14,032	28,631	42,017	54,480
Costs	−35,148	−91,335	−156,321	−292,300	−404,265	−1,331,118
Claims expenses	NA	NA		−25,120	−219,625	−1,017,003
Cost of care delivery	NA	NA	−19,810	−42,134	−69,831	−80,624
Platform & application expenses	NA	NA	−23,569	−32,209	−32,723	−29,897
Research & development expenses	NA	NA	−51,205	−80,538	−68,473	−79,155
Sales, general & administrative expenses	NA	NA	−84,270	−90,687	−187,172	−227,937
Other	NA	NA	22,533	−21,612	173,559	103,498
Net loss	−32,815	−83,786	−140,287	−213,028	−83,438	−221,449
Loans and cash (numbers in US$ ‘000)
Loans and borrowings*	NA	NA	NA	70,357	168,601	278,028
Cash and cash equivalents	NA	NA	214,888	101,757	262,581	43,475
Labour force (number of workers)
Engineers	126	266	670	515	427	Not disclosed
Sales & marketing	27	44	108	88	89	Not disclosed
Finance, HR & legal	13	71	178	146	242	Not disclosed
Clinical operations	39	202	476	586	856	Not disclosed
Clinicians	13	124	124	773	959	Not disclosed
Total	218	707	1,556	2,108	2,573	1,895
Patients (GPatHand and VBC)
GPatHand – number of registered patients (UK)	16,000	50,000	75,000	93,000	112,000	115,000
GPatHand – number of clinics (UK)	1	5	8	8	10	7
VBC members (US)	0	0	0	66,000	167,000	261,000

*non-current liabilities (incl. loan notes)

Sources:

Form 10-K (Annual Report 2022)

Form 20-F (Annual Report 2021)

Babylon Partners Limited_Annual Report 2018

Babylon Healthcare Services Ltd_Annual Report 2018

Source: Author’s analysis based on disclosed data from financial reports (Babylon Healthcare Services Limited, 2019; Babylon Holdings Ltd, 2022b, 2023; Babylon Partners Limited, 2019). For the years 2020-2022, the author drew on the last available Form 10-K Annual Report 2022 filing of the holding company (Babylon Holdings Ltd, 2023). Similarly, for the year 2019 the data was retrieved from the Form 20-F Annual Report 2021 (Babylon Holdings Ltd, 2023). For the years 2017 and 2018, the data was retrieved from the 2018 Annual Reports published by the two main subsidiaries of the holding company which filed annual reports in the United Kingdom: Babylon Healthcare Services Ltd (Babylon Healthcare Services Limited, 2019) and Babylon Partners Ltd (Babylon Partners Limited, 2019). These are estimates based on incomplete information as the group’s privately held holding company, Babylon Holdings Ltd, did not disclose financial accounts prior to the IPO in 2021. To calculate the aggregated numbers for 2017 and 2018, transfer payments between the two subsidiaries and the holding company were accounted for and an annual average sterling/US dollar exchange rate for both years was applied which was taken from the UK Office of National Statistics (UK Office for National Statistics, 2023)

Babylon Healthcare Services Ltd. (2019). Annual Report and Financial Statements: Year ended 31 December 2018. Retrieved from https://find-and-update.company-information.service.gov.uk/company/09229684/filing-history?page=2.

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Babylon Holdings Ltd. (2022b). Form 20-F: Annual Report 2021. Retrieved from https://ir.babylonhealth.com/sec-filings/all-sec-filings/content/0001866390-22-000013/0001866390-22-000013.pdf.

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Babylon Holdings Ltd. (2023). Form 10-K: Annual Report 2022. Retrieved from https://ir.babylonhealth.com/financials/all-sec-filings/content/0001866390-23-000055/0001866390-23-000055.pdf.

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Babylon Partners Ltd. (2019). Annual Report and Financial Statements: Year ended 31 December 2018. Retrieved from https://find-and-update.company-information.service.gov.uk/company/08493276/filing-history?page=2.

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UK Office for National Statistics. (2023). Average Sterling exchange rate: US Dollar XUMAUSS. Retrieved from https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/auss/mret.

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