Tempus, a company specializing in genomic testing and data analysis, made a notable entrance on the Nasdaq, with its shares climbing 15% on the first trading day reports Techcrunch. Founded by Eric Lefkofsky, also known for creating Groupon, Tempus has captured significant investor interest, showcasing the market’s appetite for health tech firms leveraging artificial intelligence.
The company’s IPO was priced at $37 per share, the upper limit of its anticipated range, bringing in nearly $411 million. This pricing places Tempus’s valuation at over $6 billion, despite being below its last private valuation of $8.1 billion. Data from PitchBook estimated Tempus’s worth at $10.25 billion in late 2022.
Launching an IPO in a lukewarm market, especially for an unprofitable firm, is an achievement. Tempus reported revenues of $531 million in 2023, accompanied by a net loss of $290 million. However, the company has made strides in reducing its operating losses from 83% in 2022 to 37% in 2023. Lefkofsky projects that Tempus will achieve positive cash flow and EBITDA by 2025.
Eric Lefkofsky established Tempus in 2015 after observing a lack of data utilization during his wife’s breast cancer treatment. His goal was to build a company that could revolutionize patient care through technology and genomic data.
Currently, Tempus is aiming to establish itself as a leader in AI-driven healthcare. Although AI revenue was just $5.5 million in 2023, or about 1% of the total revenue, the company plans to integrate AI, including generative AI, throughout its diagnostic tools. In its prospectus, Tempus described its AI initiatives as nascent but integral to its future development.
Lefkofsky is the largest shareholder, holding 30.1% of the company and 65% of the voting power, thanks to a dual-class share structure. Other major stakeholders include a firm owned by Kimberley Keywell, the ex-wife of Lefkofsky’s longtime partner Brad Keywell, which owns 10.2% of Tempus. Scottish asset manager Baillie Gifford holds a 5.9% stake, valued at $350 million at the IPO price.
Early investors in Tempus include notable firms such as NEA, Revolution, and T. Rowe Price. In April, SoftBank led a $200 million Series G5 funding round for the company.
This IPO marks the fourth public company launch for Lefkofsky, who previously took Groupon public with a valuation near $13 billion in 2011, though it now trades below $600 million.
Looking ahead, Tempus aims to transform healthcare through the deep integration of AI technologies into its genomic testing and data analysis platforms. The positive reception on its first trading day indicates strong investor confidence in this ambitious vision.
