Tempus, a genome testing and data analytics company started by Eric Lefkofsky, who formerly founded Groupon, debuted on the Nasdaq on Friday, rising about 15% at the open.
The company priced its IPO on Thursday at $37 a piece, at the top of its $35 to $37 price range, rising almost 411 million dollars at a fully discounted valuation of over $6 billion. However, Tempus’ last official private valuation was $8.1 billion, and PitchBook data estimates the company to be worth $10.25 billion at the end of 2022. Shares closed the first day of trading at $40.25, up almost 9% from the IPO price.
Despite a significant discount from its previous valuation, the IPO is a feat for an unprofitable company during what is considered a tepid time for initial public offerings. Tempus’ revenue was $531 million in 2023 with a net loss of $290 million. However, 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 were not data-driven during his wife’s breast cancer treatment. 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 in revenue, about 1% of its 2023 revenue. The company said in its prospectus that the series of its AI products is nascent, but it plans to “incorporate AI, including genetic AI” into every aspect of its diagnostic tools.
Lefkofsky is by far the company’s largest shareholder. According to S1, he owns 30.1% of the company and 65% of the shareholder vote, due to the dual-class share structure. A company controlled by Kimberly Keywell, the ex-wife of Lefkofsky’s longtime business partner Brad Keywell, owns a 10.2 percent stake in Tempus. Scottish asset manager Baillie Gifford owns 5.9% of the company, valued at $350 million at the IPO price.
The first shareholders of Tempus are NEA, Revolution and T. Rowe Price. The company raised a $200 million Series G5 from SoftBank in April. Tempus is Lefkofsky’s fourth company to take public. He is best known for founding Groupon, which went public at his valuation nearly $13 billion in 2011 but now trades below $600 million.
