Inside Tempus' Chicago office
After several years of speculation Tempus would go public, the AI-enabled precision-medicine startup from Eric Lefkofsky filed for an initial public offering today.
The company, founded in 2015, started out by providing genomic-sequencing services to treat cancers but has since expanded to other conditions. After several rounds of investment from venture-capital and private-equity investors, Tempus became a Chicago tech darling with a valuation north of $8 billion in 2020.
Now the company is looking to raise at least $100 million in a public offering, according to a filing with the U.S. Securities & Exchange Commission, though that figure is likely a placeholder due to change when terms of the share sale are set. Tempus declined to comment but plans for its stock to trade on the the Nasdaq Global Select Market under the ticker TEM.
Tempus' database includes 7.7 million clinical records and is used by more than 7,000 physicians across hundreds of provider networks and more than 65% of all academic medical centers in the U.S., the filing shows. Tempus’ biggest customers include pharmaceutical giants AstraZeneca and GlaxoSmithKline.
Tempus generated total revenue of $320.7 million and $531.8 million in the years ended Dec. 31, 2022 and 2023, but also incurred net losses of $289.8 million and $214.1 million, respectively, the filing shows. As of March 31, Tempus had accumulated a deficit of $1.5 billion, according to the filing, and the company disclosed it anticipates needing to raise additional capital to fund existing operations, develop its platform and commercialize new products.
Most of the company’s money comes from genomics testing for healthcare providers, pharmaceutical companies, biotechnology companies and researchers, according to the filing. Genomics revenue totaled $198 million and $363 million in 2022 and 2023, respectively.
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Tempus, which employs 2,300 people, many of them in Chicago, is the latest local company seeking to test out the public markets following a widespread cool down. UL Solutions went public in April and was well-received by investors. UL’s stock rose 25% in its stock market debut, closing at $34.05. At the market close today, UL was trading at $38.
Tempus IPO talk first surfaced in 2021, not long after the company raised $200 million from investors, bringing its total funding to more than $1 billion. But that was before a turbulent public market in 2022 that resulted in one of the weakest IPO markets in years and likely delayed Tempus’ dreams.
Instead of going public that year, Tempus raised $275 million in a combination of equity and debt financing.
Investors over various funding rounds have included Baillie Gifford, Franklin Templeton, Google, venture-capital fund NEA and Novo Holdings.
More recent transactions, according to the filing, include Tempus in April selling 3.4 million Series G-5 convertible preferred stock shares at the price of $57 apiece to Japanese investment firm SoftBank for a total of $200 million.
Morgan Stanley, JPMorgan Chase, Allen & Company, BofA Securities, TD Cowen, Stifel and William Blair are among the underwriters on Tempus’ offering. Meanwhile, Cooley attorneys, including some in Chicago, advised Tempus on the deal, including Christina Roupas, Richard Segal, Courtney Tygesson and Eric Jensen.
Crain's reporter John Pletz contributed.
This story first appeared in Crain's Chicago Business.
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