Sifted - Ali Parsa sets the record straight

Good morning there,

Ali Parsa is back. Just over a year on from the collapse of his healthtech giant Babylon — which saw investors lose hundreds of millions of dollars worth of shares and hundreds of employees their jobs — the enigmatic founder has emerged from stealth with a new startup.

Quadrivia is building a “comprehensive AI assistant that does every aspect of healthcare” and it has the potential to be “significantly” bigger than Babylon, says Parsa. It’s the kind of big vision we've come to expect from him. 

But getting to this point has been quite the journey, as I found out when I sat down with Parsa for brunch last week. It was two years on from our last interview — when Babylon was in big trouble following a disastrous SPAC that left the company with a $300m hole in its finances. The following summer the company delisted, botched a merger, collapsed and was sold off for parts. It was the “hardest” period of Parsa’s career, he says. 

Over avocado on toast, he told me why he thinks Babylon fell, how the media got it wrong when it covered the collapse and what’s next for his new venture (TL;DR: I left with a slight feeling of deja vu).

Elsewhere today:

• Quantum startup Riverlane hikes R&D spend as sector races to commercialise tech
• UK fintech Stenn to 'defend against' HSBC Innovation Banking application to put the startup into administration
• 5 mistakes not to make as a climate tech founder.

— Kai Nicol-Schwarz, reporter

/A message from our sponsor  Work in Lithuania

Think big. Move to Lithuania

Lithuania is where ambition meets reality. Join a tech scene that’s challenging the status quo and creating a lifestyle that goes beyond work. Discover why Lithuania isn’t just an option — it’s the answer.

🇬🇧 HSBC Innovation Banking UK has applied on behalf of London-based fintech Stenn to appoint administrators, according to documents accessed via Caseboard. Companies typically file to appoint administrators when in financial distress and to avoid liquidation — but a Stenn spokesperson attributed the filings to a “sudden action by an investor” and are “actively defending” against the measure.

• “We are committed to resolving this matter promptly,” they said. “While legal proceedings are ongoing, we are not commenting further.” 
• The application consists of two filings, which were both submitted yesterday, relating to Stenn International and Stenn Assets UK LTD, two companies under the wider company umbrella of the Stenn group. In each filing HSBC Innovation Banking is listed as an applicant for Stenn. 
• HSBC Innovation Banking UK declined to speak on client relationships when reached for comment.  

👩‍🔬 Quantum computing startup Riverlane more than doubled its spending on research and development (R&D) in 2023 amid a flurry of investment in the sector.

• The UK-based company — which is building technology that helps quantum computers make fewer errors — saw R&D costs rise from £2.7m in 2022 to £7m in 2023, according to its latest company accounts. Losses before tax rose from £6.2m to £8.3m, while administrative expenses fell from £7m to £5.4m. 
• Quantum has already hit record funding levels in 2024 as investor confidence has surged over the past few years, driven by research breakthroughs and increasing commercial interest. Globally, startups in the sector have raised $1.8bn since the start of the year, according to Dealroom, an increase from $1.3bn in 2021.

💰 Zilch is in talks to raise £150m as part of a secondary share sale, Sky News reported yesterday. The UK buy now, pay later (BNPL) fintech has recruited CitiBank to advise on the financing, which would value it above the £1.5bn valuation it secured in its last funding round, the report said. 

• Zilch CEO Philip Belamant told Sifted last month that the BNPL player was in the advanced stages of securing a secondary share sale after reporting its first profitable quarter. 
• Employee share sales, a type of secondary deal which sees equity-holding employees cash in on their stocks, are in vogue. In August, Revolut upped its valuation to $45bn in an employee share sale; investment platform Moneybox and UK neobanks Monzo and Tide have also done secondary rounds in recent months. 

🥑 Brunch with Babylon founder Ali Parsa: 'I'm not one to sit down and lick my wounds'.

🍀 5 mistakes not to make as a climate tech founder.

🌍 Online | December 12. Learn how to attract top talent, streamline your recruitment process and hire smarter to drive your startup's success at our free, virtual Sifted Talks. RSVP.

Sifted readers, have your say! 

We’re on a mission to amplify and empower Europe’s startup innovators, and your feedback can make all the difference. Take our quick 10-minute survey to help us deliver the news and insights you value most.

Berlin-based CoachHub, a digital coaching platform, raised €40m in funding from HSBC Innovation Banking UK.

Paris-based Happydemics, a platform that automates ad campaign assessment, raised €13m in Series B funding. Wille Finance and Adelie Capital led the round. 

Paris-based Orakl Oncology, a precision oncology company developing AI-powered drug development tools to combat digestive cancers, raised €11m in seed funding. Singular led the round and was joined by investors including Bpifrance and Grand Prix i-Lab.

Zug, Switzerland-based Brighty, a digital finance platform which combines traditional digital banking with stablecoins and decentralised finance, raised $10m in funding. Futurecraft Ventures led the round.

Paris-based Omnidoc, which provides tele-expertise and e-RCP solutions to healthcare professionals and medical organisations, raised €6m in funding. Alven led the round and was joined by investors including Kurma and Newfund.

Berlin-based NetBird, a networked security platform, raised €4m in seed funding. InReach Ventures and Nauta led the round and were joined by investors including Antler. The German Federal Ministry of Education and Research also provided grant financing.

Belfast-based Solarfix, a solar panel design and installation startup, raised €1.8m in funding. Whiterock led the round.

London-based Synthera, which uses GenAI for financial risk management, raised €1.7m in pre-seed funding. Motive Ventures led the round and was joined by investors including Entrepreneur First, Transpose Platform, KDX, BuenTrip Ventures, Robin Capital and Angel Invest.

Amsterdam-based Recall, an AI-powered personal encyclopedia, raised $1.5m in funding. Jason Calacanis led the round and was joined by investors including Blockchain Founders Capital and Rocket Capital.

London-based Wexler AI, which provides an AI-powered legal intelligence platform, raised $1.4m in pre-seed funding. Myriad Venture Partners led the round and was joined by investors including ComplyAdvantage, Moonpig, Tractable and Credit Kudos.

If you’d like to submit a deal, get in touch. 

For more deals, analysis and M&A insight, become a Pro subscriber to receive our weekly Deals newsletter.