Tempus Data Analytics Firm Hits $2 Billion Valuation, One of a Handful of Chicago “Unicorns”
On August 29, Chicago-based Tempus, which focuses on data analytics for molecular and clinical data, announced it had raised $110 million in Series E financing. This brought total money raised so far to $320 million. This also gave the company a valuation of $2 billion. The round included Baillie Gifford, T. Rowe Price, Revolution Growth, New Enterprise Associates (NEA) and other existing investors. A venture-backed private company with a valuation of at least $1 billion is dubbed a “unicorn.” (So far, no one has started calling companies with $2 billion in valuation a “rhinoceros.”)
Tempus is also noted for being founded by Eric Lefkofsky in 2015. Lefkofsky is the co-founder of Groupon. Forbes writes, “Propelled to start Tempus after, Lefkofsky says, he noticed during his wife’s cancer treatment a few years ago that there was a lack of data to inform her treatment options, his company now collects both molecular and clinical data from hospitals around the country and analyzes it within a database with the aim of improving treatment for patients with cancer. So far, they’ve partnered with some 250 hospital systems and have collected 2 million clinical records.”
The company expects to use the Series E funds to expand beyond oncology into healthcare areas like cardiovascular disease and diabetes, as well as to push outside the U.S. into Europe, Australia and Asia.
According to CB Insights, there are only 100 “unicorns” in the U.S. and about 200 worldwide. In the Chicago area, there are only a handful, including Avant, ExteNet, SMS Assist and Uptake Technologies. Uptake was founded by Lefkofsky’s longtime business partner, Brad Keywell.
In biotech, probably the best-known “unicorn” is Cambridge, Massachusetts-based Moderna Therapeutics, which focuses on messenger RNA (mRNA) technology. Another is Ginkgo Bioworks, which hit the “unicorn” status this year.
Tempus employs almost 500 people. Lefkofsky told Crain’s Chicago Business, “We’re in a period of rapid growth and acceleration. This capital allows us to look more broadly than just cancer in the United States. We’ve begun to think about Europe, Asia and Australia, and how our model would extend there. We’ll be cautious in any step we take. These tools and our lab are operating at scale, so we feel like we’re in a unique position to extend our platform into other areas.”
Without disclosing specific data, Lefkofsky told Crain’s, “In general, we’re now sequencing tens of thousands of patients. We hope to shortly be sequencing hundreds of thousands of patients. Clinicians are getting these tests. They’re using it as an important tool in prescribing therapeutic treatments for patients.”
Tempus is working in an area where two other big companies are focused—Flatiron Health, which was acquired by Roche earlier this year, and Foundation Medicine a few months later. It has several areas, including a laboratory that sequences tumor genetics in addition to inherited genes to determine which mutations affect an individual’s cancer. It also collects and analyzes clinical data from doctors, hospitals and clinical trials in an attempt to analyze patterns and standardize the information. Its products and services fall into four broad categories: genomic sequencing, clinical data structuring, image recognition, and biological modeling.
The company’s collaborators include Cleveland Clinic, Mayo Clinic, University of Michigan Comprehensive Cancer Center, Penn Medicine and many others.
Forbes points out that Tempus’ valuation had doubled in the last six months. Per Pitchbook, it was valued at a bit more than $1 billion after its Series D financing in March. The Flatiron deal was for $1.9 billion. Roche picked up Foundation Medicine in June for $2.4 billion.
Mohamad Makhzoumi, general partner and head of New Enterprise Associate’s healthcare services and healthcare IT division, told Forbes, “I don’t know how long this is going to take, and I don’t know what the right kind of business model is going to be, but it’s undeniable that this is going to be a huge chunk of the healthcare economy in the U.S.”