Eric Lefkofsky is aware of the Public Itemizing Rodeo effectively and is about to attend it for the fourth time. The serial entrepreneur, whose web value is estimated at practically $4 billion, has taken three of his corporations public.
Right now, he’s the founding father of Tempus, a genomic testing and knowledge analytics firm making ready for an preliminary public providing. However he’s finest referred to as the co-founder of each day offers pioneer Groupon, which went public in 2011 at a valuation of practically $13 billion in one of many 12 months’s most high-profile debuts.
Whereas the general public listings of his different two corporations, InnerWorkings in 2006 and Echo World Logistics in 2009, did not have a serious impression on buyers, Lefkofsky did effectively, however Groupon’s The IPO and the years after it bought into infamous hassle. InnerWorkings, a provide chain startup he based in 2001, was offered to non-public fairness companies in 2021 for a fraction of its IPO market worth.
In the meantime, shares of Echo World Logistics have steadily appreciated in worth throughout its 11-year historical past as a public firm earlier than being offered to a personal fairness agency at a 50% premium to its final buying and selling value in 2021.
A few of Groupon’s controversy entails a report that Lefkofsky took greater than $300 million from Groupon’s pre-IPO financing, leaving the corporate with little working capital, and after regulators reviewed 2017 monetary knowledge Later, the income reported within the revised S-1 submitting was lowered by about half. The unorthodox determination additionally sheds mild on one other deal from his previous. In 2000, he offered his dot-com firm, Starbelly.com, to a 50-year-old firm; a 12 months later, in accordance with some stories, the corporate filed for chapter.
All of it lends to Lefkofsky a fame as a Midas contact, not less than to himself, however maybe to not his firm’s long-term buyers.
With Tempus, Lefkofsky was as soon as once more making an attempt to create a long-lasting, beneficial firm. It was reportedly the success of his spouse’s breast most cancers therapy that prompted him to discovered Tempus in 2015.
“I used to be baffled by how little knowledge was included in her care,” he instructed Forbes final 12 months. “I turned fascinated with the concept all these applied sciences that had been created for different industries could possibly be utilized to most cancers care and Serving to physicians make data-driven choices.”
He resigned as Groupon CEO in 2015 when the corporate’s valuation fell to $2.6 billion. (Groupon’s present market capitalization is about $600 million.) On the time, Lefkofsky was specializing in Lightbank, an early-stage enterprise capital agency.
Curiously, the Tempus S-1 submitting states that he obtained no wage for the previous two years (the S-1 doesn’t present any named official with greater than two years of govt compensation). Nevertheless, the submitting additionally says he’ll obtain a wage of $800,000 and a bonus of $800,000 beginning in 2025. . Tempus additionally paid for $7.5 million value of most popular inventory issued to him and paid $200,000 for a personal jet, the paperwork present.
Tempus’ income in 2023 will probably be $531 million, a 66% enhance from $321 million in 2022. The silver lining in its financials, nonetheless, is that its working loss fee has narrowed from 83% in 2022 to 37% in 2023, in accordance with the S-1 submitting.
Moreover, Tempus has signed an settlement with Pathos AI, one other firm based by Lefkofsky. Pathos AI is a drug discovery platform based in 2020. In the meantime, Tempus chief working officer Ryan Fukushima serves as Pathos’ CEO and splits his time between the 2 corporations.
There are different indicators that Lefkofsky exercised extra energy at Tempus than was customary.
Whereas Tempus has but to fill out its listing of main shareholders, revealing solely that Lefkofsky is amongst them and owns not less than 5% of the corporate, the billionaire clearly needs to retain full management of the corporate as soon as it goes public. Tempus granted his shares as much as 30 votes per share. Supervoting shares usually are not unusual, however 10 votes per share is extra frequent, and 20 votes is taken into account larger. So, for a CEO of a healthcare firm, shareholder affect is unusually excessive, and we’ll should see if that affect diminishes in future S-1s to point whether or not potential buyers are hesitant about it.
Nevertheless, Tempus’ S-1 could not overstate Levkowsky’s significance to the corporate’s future. One healthcare enterprise capital investor who invests in genomics and knowledge analytics corporations instructed TechCrunch that with out Lefkofsky’s advertising and fundraising abilities, Tempus wouldn’t have grown to the dimensions it has now, nor would it not have obtained as a lot capital.
Tempus has raised $1.42 billion from buyers together with his firm, Lightbank, in addition to NEA, Revolution Development, T. Rowe Value, Novo Holdings, Franklin Templeton and Baillie Gifford. The corporate was final valued at $8.1 billion in October 2022.
No matter how a lot cash Tempus raised within the IPO, the corporate’s prospectus made clear that it was removed from breaking even and would wish to “elevate extra capital sooner or later.” Whereas most unprofitable corporations sometimes embrace this element of their prospectuses, buyers can count on Tempus to conduct a follow-on public providing in some unspecified time in the future, which might drag down its inventory value.
Tempus can be making an attempt to place itself as an AI firm, though AI income solely accounts for $5.5 million of complete income, or about 1% of complete income in 2023.
“I believe Tempus is betting by itself progress and the maturity of synthetic intelligence in life sciences, however I do not assume the corporate has confirmed that but with its present merchandise,” the healthcare investor stated.
The corporate stated in its S-1 submitting that whereas its “synthetic intelligence product line is nascent, it plans to embed synthetic intelligence, together with generative synthetic intelligence, into each facet of its diagnostic instruments.” Tempus declined to touch upon the S-1 Go away a remark about one thing aside from what’s listed in.
