Serial entrepreneur Eric Lefkofsky, whose net worth is nearly $4 billion, is preparing for his fourth IPO with his latest venture, Tempus, a company specializing in genomic testing and data analysis. Eric Lefkofsky co-founded Groupon, which had a high-profile IPO in 2011, making him widely known.
Eric Lefkofsky has a rich history of taking companies public. Before Tempus, he successfully listed three companies:
- Groupon: Went public at a $13 billion valuation but faced post-IPO challenges.
- InnerWorkings: Eric Lefkofsky founded InnerWorkings in 2001. This supply chain startup had a smooth IPO in 2006 but sold to private equity in 2021 for a fraction of its market cap.
- Echo Global Logistics: Echo Global Logistics went public in 2009, and its stock appreciated steadily before private equity bought it in 2021 at a 50% premium over its last trading price.
Controversy marked Groupon’s IPO, including reports that Lefkofsky pocketed $300 million from a pre-IPO round, which limited the company’s working capital. Additionally, Groupon had to revise its revenue figures significantly lower in response to regulatory scrutiny.
Lefkofsky’s past also includes the sale of his dot-com company Starbelly.com in 2000, which led to the acquiring company filing for bankruptcy a year later. These incidents have given Lefkofsky a reputation for benefiting personally from his ventures, sometimes at the expense of long-term investors.
Founding Tempus
Lefkofsky founded Tempus in 2015, inspired by his wife’s successful breast cancer treatment. He was struck by the minimal use of data in her care and saw an opportunity to apply technology from other industries to cancer treatment, enabling data-driven decisions by physicians.
Tempus’ recent financials show growth and challenges:
- Revenue: $531 million in 2023, up 66% from $321 million in 2022.
- Net Losses: $290 million in 2023, compared to $214 million in 2022.
- Operating Loss Margin: Improved from 83% in 2022 to 37% in 2023.
Despite not drawing a salary for the past two years, Lefkofsky is set to receive $800,000 and an $800,000 bonus starting in 2025. He also received a $5.3 million dividend from company stock and benefits including $7.5 million in preferred shares and $200,000 for private plane expenses.
Connections and Influence
Tempus has ties to Pathos AI, another Lefkofsky-founded company focusing on drug discovery. Pathos pays Tempus for data licensing, and Tempus’ COO, Ryan Fukushima, serves as Pathos’ CEO.
Tempus has granted Lefkofsky’s shares 30 votes per share, a significant amount compared to the more common 10 votes per share. This suggests Lefkofsky intends to retain substantial control over the company post-IPO.
Investment and Future Prospects
Tempus has raised $1.42 billion from investors, including Lefkofsky’s Lightbank, NEA, Revolution Growth, T. Rowe Price, Novo Holdings, Franklin Templeton, and Baillie Gifford. The company’s last valuation was $8.1 billion in October 2022, with a recent $200 million investment from SoftBank.
The S-1 filing indicates that Tempus will need additional capital in the future, suggesting a potential follow-on public offering, which could impact share prices.
Tempus is positioning itself as an AI company, although AI accounted for only $5.5 million (about 1%) of its total revenue in 2023. The company plans to integrate AI, including generative AI, into all its diagnostic tools, but has yet to prove its AI capabilities significantly.
Eric Lefkofsky’s latest venture, Tempus, is set to enter the public market, promising growth and innovation in AI and genomic testing. However, with its current financial losses and the need for additional capital, investors will be closely watching to see if Tempus can deliver long-term value.
