Tempus, a genomic testing and data analytics company founded by Eric Lefkosky, who previously founded Groupon, debuted on Nasdaq on Friday and was up about 15% at the open.
The company priced its initial public offering on Thursday at $37 each, at the top of its $35 to $37 price range, raising nearly $411 million at a fully diluted valuation of more than $6 billion. However, Tempus' last official private valuation was $8.1 billion, and PitchBook data estimates the company was valued at $10.25 billion by the end of 2022. Shares closed the first day of trading at 40.25 dollars, almost 9% more than the IPO price.
Despite the substantial discount to its previous valuation, the IPO is a feat for an unprofitable company at a time that is considered lukewarm for launching public offerings. Tempus' revenue was $531 million in 2023 with a net loss of $290 million. But the company's operating losses have narrowed from 83% in 2022 to 37% in 2023, and Lefkosky 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 relying on data during his wife's breast cancer treatment. He set out to build a company that used technology and data derived from genomic sequencing.
Tempus is now trying to position itself as an ai company, even though ai revenue accounted for just $5.5 million, about 1% of its 2023 revenue. The company said in its prospectus that its product line of ai is nascent, but it intends to “integrate ai, including generative ai” into all aspects of its diagnostic tools.
Lefkofsky is by far the company's largest shareholder. According to S1, due to the dual class share structure, it owns 30.1% of the company and 65% of the shareholders' voting power. The company controlled by Kimberley Keywell, the ex-wife of Lefkosfky's long-time business partner Brad Keywell, owns a 10.2% stake in Tempus. Scottish asset manager Baillie Gifford owns 5.9% of the company, valued at $350 million at the IPO price.
Tempus' early shareholders 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 has taken public. He is best known for founding Groupon, which went public at a valuation of almost 13 billion dollars in 2011but now it is trading below $600 million.
Tempus is the fourth company Lefkofsky has taken public. He is best known for founding Groupon, which went public at a valuation of almost 13 billion dollars in 2011but now it is trading below $600 million.
