Billionaire Eric Lefkofsky’s Fourth IPO: AI Health Tech Firm Tempus

Eric Lefkofsky

Eric Lefkofsky is no stranger to the IPO process, having successfully taken three companies public. With an estimated net worth of nearly $4 billion, Lefkofsky is now preparing for the fourth IPO of his career. He is the founder of Tempus, a genomic testing and data analysis company set to go public, but he is best known for co-founding Groupon, which had a notable IPO in 2011 at a valuation of nearly $13 billion.

While Groupon’s IPO and subsequent performance were marred by difficulties, Lefkofsky’s other ventures, InnerWorkings and Echo Global Logistics, saw more stable successes. InnerWorkings, launched in 2001, was sold to private equity in 2021 for less than its IPO value, whereas Echo Global Logistics’ stock appreciated steadily before its private equity sale in 2021 at a 50% premium.

Lefkofsky’s journey has not been without controversy. During Groupon’s pre-IPO phase, he reportedly took over $300 million, limiting the company’s working capital. Additionally, he halved Groupon’s reported revenue in revised S-1 filings after regulatory scrutiny. Another contentious deal involved selling his dot-com company, which later resulted in bankruptcy for the acquiring company.

Despite the controversies, Lefkofsky has a reputation for creating significant value, at least for himself. With Tempus, he aims to build a long-lasting, impactful company. Inspired by his wife’s successful breast cancer treatment, Lefkofsky founded Tempus in 2015 to integrate data and technology into cancer care, enabling physicians to make data-driven decisions.

In 2015, Lefkofsky stepped down as Groupon’s CEO when its value fell to $2.6 billion (now around $600 million) and shifted his focus to his venture firm, Lightbank. According to Tempus’ S-1 filing, he hasn’t taken a salary in the past two years but is set to receive $800,000 in salary and an $800,000 bonus starting in 2025. Despite this, he received a $5.3 million dividend from company stock this year and had $7.5 million worth of preferred shares issued to him and $200,000 for private plane expenses covered.

Tempus reported $531 million in revenue for 2023, a 66% increase from 2022. However, the company still faces substantial losses, with net losses of $290 million in 2023 and $214 million in 2022. Nonetheless, the operating loss margin improved from 83% in 2022 to 37% in 2023.

Tempus has an agreement with Pathos AI, another Lefkofsky-founded company focused on drug discovery, which pays Tempus for data licensing rights. Tempus’ COO, Ryan Fukushima, also serves as Pathos’ CEO, managing responsibilities for both companies.

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Lefkofsky’s control over Tempus is notable. He holds super voting shares granting 30 votes per share, far exceeding the common 10 to 20 votes per share seen in other companies. This setup highlights Lefkofsky’s desire to maintain significant control post-IPO, a move that might face resistance from prospective investors.

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