Tempus rises 9% on the first day of trading, demonstrating investor appetite for a health tech
Tempus, a company focused on genomic testing and data analysis, made a striking debut on Nasdaq last Friday. Founded by Eric Lefkofsky, who also founded Groupon, Tempus opened its IPO with a 15% rise. The company priced its shares at $37 each, which was at the top of its proposed range, raising nearly $411 million and securing a fully diluted valuation exceeding $6 billion. Despite a lower valuation compared to its last private valuation of $8.1 billion, and an estimated $10.25 billion valuation in late 2022 by PitchBook, shares closed at $40.25, marking a 9% increase from the IPO price.
Eric Lefkofsky’s Vision
Lefkofsky founded Tempus in 2015 after observing a lack of data usage in his wife’s breast cancer treatment. His mission was to create a company that leverages technology and genomic sequencing data to enhance medical treatments. Despite being unprofitable, with $531 million in revenue and a $290 million net loss in 2023, Tempus has shown significant progress. Operating losses have reduced from 83% in 2022 to 37% in 2023. Lefkofsky told CNBC that he expects Tempus to be cash-flow and EBITDA positive by 2025.
AI Integration in Tempus
Tempus is working towards positioning itself as an AI company. Though AI accounted for just $5.5 million, or 1% of its 2023 revenue, Tempus plans to integrate AI, including generative AI, across all its diagnostic tools. This shift aims to enhance the company’s offerings and solidify its standing in the competitive health tech market.
Lefkofsky remains the largest shareholder, holding 30.1% of the company and 65% of shareholder voting power due to a dual-class share structure. Kimberly Keywell, ex-wife of Lefkofsky’s business partner Brad Keywell, owns a 10.2% stake. Scottish asset manager Baillie Gifford holds a 5.9% stake, valued at $350 million at the IPO price. Early investors include NEA, Revolution, and T. Rowe Price. In April, Tempus raised $200 million from SoftBank in a Series G5 round.
Lefkofsky’s Public Ventures
This is the fourth company Lefkofsky has taken public. He is best known for founding Groupon, which went public at a valuation of nearly $13 billion in 2011, though its current market value has dropped below $600 million. Tempus’ successful IPO, despite the challenging market for public offerings, highlights investor confidence in its potential.
Tempus’ IPO underscores a growing interest in health tech companies with promising AI capabilities. As Tempus continues to integrate AI into its diagnostics, it aims to revolutionize the way data is used in healthcare, much like how Lefkofsky envisioned during its inception. This debut on Nasdaq marks a significant milestone, not just for Tempus, but for the broader health tech and AI sectors, showcasing the potential of data-driven approaches in transforming healthcare outcomes.
#TempusIPO #HealthTech #AI #GenomicTesting #InvestorConfidence