Tempus is up 15% on its first day of trading, demonstrating investor appetite for health tech with the promise of artificial intelligence

Tempus, a genomic testing and data analytics company founded by Eric Lefkosky, who previously founded Groupon, debuted on the Nasdaq Stock Exchange on Friday, up about 15% since opening.

On Thursday, the company priced its initial public offering at $37 apiece, the top of the $35 to $37 price range, raising almost $411 million at a completely diluted valuation of over $6 billion. However, Tempus’ last official private valuation was $8.1 billion, and PitchBook data estimates the company was valued at $10.25 billion at the end of 2022. The shares closed the first day of trading at $40.25, a rise of almost 9% over the IPO price.

Despite a big discount to the previous valuation, the initial public offering is a feat for an unprofitable company in a period considered not very favorable for conducting public offerings. Tempus’ 2023 revenues were $531 million and its net loss was $290 million. However, the company’s operating losses dropped from 83% in 2022 to 37% in 2023, and Lefkosky told CNBC that he expects Tempus to be money flow and EBITDA positive in 2025.

Lefkofsky founded Tempus in 2015 after noticing that doctors weren’t relying on data when treating his wife’s breast cancer. He decided to construct an organization using the technology and data from genome sequencing.

Tempus is currently struggling to position itself as an artificial intelligence company, regardless that AI revenue accounted for just $5.5 million in revenue, or about 1% of its revenue in 2023. In its prospectus, the company said its AI product line it’s still in its infancy, but it surely intends to “embed artificial intelligence, including generative artificial intelligence,” into every aspect of its diagnostic tools.

Lefkofsky is by far the company’s largest shareholder. According to S1, he holds 30.1% of the company’s shares and 65% of shareholder votes, resulting from the dual-class share structure. The company, controlled by Kimberley Keywell, the ex-wife of Brad Keywell, Lefkosfky’s longtime business partner, owns 10.2% of Tempus. Scottish asset manager Baillie Gifford owns a 5.9% stake in the company, value $350 million at its IPO price.

The original shareholders of Tempus were NEA, Revolution and T. Rowe Price. In April, the company raised a $200 million G5 series from SoftBank. Tempus is the fourth company that Lefkofsky is taking public. He is best known for founding Groupon, which went public at a valuation almost $13 billion in 2011but it surely is currently valued at lower than $600 million.

Tempus is the fourth company that Lefkofsky is taking public. He is best known for founding Groupon, which went public at a valuation almost $13 billion in 2011but it surely is currently valued at lower than $600 million.