**Tempus Debuts on Nasdaq, Rises 15% on Opening**
Tempus, a genomic testing and data analysis company founded by Eric Lefkosky, the previous founder of Groupon, made its debut on Nasdaq on Friday. The company saw a positive start, with its stock rising approximately 15% on the opening day.
**IPO Pricing and Valuation**
Tempus priced its initial public offering (IPO) at $37 per share, which was at the top end of its price range of $35 to $37. This resulted in the company raising nearly $411 million and achieving a fully-diluted valuation of over $6 billion. It is worth noting that Tempus’ last official private valuation was $8.1 billion, and according to PitchBook data, the company was valued at $10.25 billion in late 2022. Although shares closed the first day of trading at $40.25, up nearly 9% from the IPO price, this still represents a substantial discount from its previous valuations.
**Unprofitable Company’s IPO Success**
The IPO success of Tempus is noteworthy considering the current lukewarm market for public offerings and the fact that the company is yet to turn a profit. In 2023, Tempus generated revenues of $531 million but incurred a net loss of $290 million. However, the company has made progress in reducing its operating losses from 83% in 2022 to 37% in 2023. Eric Lefkosky expressed his optimism about Tempus’ future financial performance, stating that he expects the company to achieve positive cash flow and EBITDA in 2025.
**The Mission Behind Tempus**
Eric Lefkosky founded Tempus in 2015 after realizing that doctors lacked access to relevant data during his wife’s breast cancer treatment. With the aim of leveraging technology and data derived from genomic sequencing, he established Tempus as a company dedicated to improving medical outcomes through advanced analytics.
**Tempus’ Focus on AI**
Tempus is now positioning itself as an AI company, despite AI revenue accounting for only around 1% of its total revenue in 2023, equivalent to approximately $5.5 million. In its prospectus, Tempus states its intention to incorporate AI, including generative AI, into all aspects of its diagnostics tools. While the AI product line is still in its early stages, Tempus is committed to leveraging AI technology to drive innovation and enhance the effectiveness of its offerings.
**Ownership Structure and Shareholders**
Eric Lefkosky is the largest shareholder in Tempus, holding a 30.1% stake in the company and possessing 65% of the shareholder voting power due to the dual-class share structure. Another significant shareholder is the firm controlled by Kimberley Keywell, the former wife of Brad Keywell, Lefkosky’s longtime business partner, who owns a 10.2% stake in Tempus. Scottish asset manager Baillie Gifford holds a 5.9% stake in the company, valued at $350 million at the IPO price. Early shareholders in Tempus include NEA, Revolution, and T. Rowe Price.
**Lefkosky’s Track Record**
Tempus marks the fourth company that Eric Lefkosky has taken public. He is most well-known for founding Groupon, which had an IPO valuation of nearly $13 billion in 2011 but currently trades at under $600 million. His experience in successfully launching companies into the public market adds to the credibility and expertise behind Tempus’ latest venture.
In conclusion, Tempus’ successful IPO debut and its positioning as an AI-driven genomic testing and data analysis company reflect its potential for growth and innovation in the healthcare industry. With its strong leadership, dedicated team, and focus on leveraging advanced technologies, Tempus aims to revolutionize medical treatments and improve patient outcomes in the years to come.