Tempus AI, a pioneering health-care diagnostics firm leveraging artificial intelligence to enhance medical testing accuracy, saw its stock rise by up to 15% during its initial public offering (IPO) on the Nasdaq Stock Market. Trading under the ticker symbol “TEM,” Tempus AI made its public debut on Friday, marking a significant milestone for the company.
Priced at $37 per share on Thursday, at the top end of its initial $35 to $37 target range, Tempus AI successfully raised $410 million, achieving an implied valuation of just over $6 billion. The early trading surge briefly pushed the company’s valuation to $7 billion, although it settled to close its first day of trading with a 9% increase, bringing its market capitalization to approximately $6.65 billion.
Founded on the belief that AI can revolutionize healthcare by guiding therapy selection and treatment decisions, Tempus AI reported total revenue of $531.8 million in 2023, alongside a net loss of $214.1 million. The company aims to unlock the potential of precision medicine through Intelligent Diagnostics, which combine laboratory results with patients’ clinical data to deliver personalized and accurate diagnoses.
The company, based in Chicago, rapidly developed an at-home testing kit during the COVID-19 pandemic, addressing the urgent need for widespread diagnostic testing. However, Tempus AI’s mission extends beyond the pandemic.Tempus AI’s CEO, Eric Lefkofsky, who co-founded Groupon, was inspired to create Tempus AI after his wife was diagnosed with breast cancer, highlighting the pressing need for advanced diagnostic tools in oncology. Tempus AI’s genomic tests aim to understand tumors at the molecular level, enabling tailored treatment plans for cancer patients.
Morgan Stanley, J.P. Morgan, and Allen & Company served as the lead underwriters for Tempus AI’s IPO. Notable investors in the company include Google, Baillie Gifford, Franklin Templeton, NEA, and T. Rowe Price, as reported by PitchBook data.