Tempus, a genomic testing and data analysis company started by Eric Lefkofsky, who previously founded Groupon, debuted on Nasdaq on Friday, rising about 15% on the opening.
The company priced its IPO on Thursday at $37 apiece, at the top of its $35 to $37 price range, raising nearly $411 million at a fully diluted valuation of over $6 billion. Tempus’ last official private valuation was $8.1 billion, however, and PitchBook data estimates that the company was valued at $10.25 billion in late 2022. Shares closed the first day of trading at $40.25, up nearly 9% from the IPO price.
Despite the substantial discount from its previous valuation, the IPO is a feat for an unprofitable company during what’s considered to be a lukewarm time to launch public offerings. Tempus’ revenues were $531 million in 2023 with a net loss of $290 million. But the company’s operating losses have shrunk from 83% in 2022 to 37% in 2023, and Lefkofsky told CNBC that he expects Tempus to be cash-flow and EBITDA positive in 2025.
Lefkofsky founded Tempus in 2015, after noticing that doctors didn’t rely on data during his wife’s treatment of breast cancer. He said he set out to build a company that uses technology and data derived from genomic sequencing.
Tempus is now trying to position itself as an AI company, even though AI revenue accounted for only $5.5 million of revenue, approximately 1% of its 2023 revenue. The company said in its prospectus that its AI product line is nascent, but it intends “to embed AI, including generative AI” in every aspect of its diagnostics tools.
Lefkofsky is by far the largest shareholder in the company. According to the S1, he holds 30.1% of the company and 65% of shareholder voting power, due to the dual-class share structure. A firm controlled by Kimberly Keywell, the former wife of Brad Keywell, Lefkofsky’s longtime business partner, owns a 10.2% stake in Tempus. Scottish asset manager Baillie Gifford, holds 5.9% of the company, worth $350 million at the IPO price.
Early shareholders in Tempus include NEA, Revolution and T. Rowe Price. The company raised a $200 million Series G5 from SoftBank in April. Tempus is the fourth company Lefkofsky is taking public. He is most known for having founded Groupon, which went public at a valuation of nearly $13 billion in 2011 but now trades at under $600 million.
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