Healthcare technology provider Tempus AI raises $410M in IPO


Tempus AI Inc., a provider of medical testing services and clinical software, closed its first day of trading with its stock price up 8.7%.

The company floated its shares on the Nasdaq this morning following an initial public offering that raised $410 million. Tempus AI sold 11 million shares for $37 apiece, a price that represented the top end of its initial target range. The company now has a market capitalization of about $6.65 billion.

Tempus AI was launched in 2015 by Groupon Inc. co-founder Eric Lefkofsky. Its offerings are used by more than 7,000 physicians across hundreds of healthcare institutions to diagnose patients, develop treatment plans and manage the clinical information they require for their work. It also helps pharmaceutical companies speed up their drug discovery initiatives and organize clinical trials.

The company’s first major focus area is the medical testing segment. The company operates clinical labs that can analyze patient data to help physicians generate an initial diagnosis, as well as track how a medical condition changes over time. Tempus AI says it can correlate test results with a patient’s other clinical data to identify ways of optimizing treatment plans.

“The drugs recommended, the clinical trials explored, the care pathways evaluated, the adverse events considered—all have the potential to be refined and enhanced when test results are connected to a patient’s personal profile, enabling the right patient to be routed to the right therapy at the right time,” the company explained in the filing for its initial public offering.

It also operates what it describes as one of the world’s largest libraries of clinical and molecular oncology data. According to the company, the cloud-based repository includes over 200 petabytes of data from more than 5.6 million anonymized patient records. It makes that information available to pharmaceutical companies, which can use it to support their researchers’ drug discovery efforts.

Tempus AI’s revenue grew from $320.7 million in 2022 to $531.8 million last year. During the same time, the company trimmed its losses by more than 30% to $214.1 million. In its IPO filing, it disclosed that it plans to maintain its revenue momentum by developing more AI services and revealed that it will have to raise additional capital to support the effort. 

The company detailed that “our goal is to embed AI, including generative AI, throughout every aspect of diagnostics to enable physicians and researchers to make personalized, data-driven decisions that improve patient care.”

Photo: Tempus AI

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