|OT to Groupon. Lefkofsky's next act:|
Groupon’s billionaire cofounder Eric Lefkofsky just raised $70 million for his new company
Posted Sep 25, 2017
by Connie Loizos ( @cookie)
Chicago billionaire Eric Lefkofsky has started five companies, none of which would seem to lead him to found a company that’s trying to cure cancer. Yet investors just gave his newest, two-year-old concern, Tempus, $70 million in Series C funding to do just that.
No doubt they’re attracted to the company’s mission, which is to amass large quantities of genomic and clinical data from cancer patients so that doctors can use the information to better personalize treatment.
But Lefkofsky — along with his longtime business partner Brad Keywell — also has the Midas touch. Indeed, though Lefkofsky has been painted as both brilliant and at times, unorthodox, he’s made a ton of money for his earliest investors.
Consider Groupon, the daily deals site that Lefkofsky cofounded in 2008. It hasn’t fared as well as a public company as some might have hoped. When it IPO’d in 2011, it was worth $16 billion; today it’s market cap is roughly $2.5 billion. (Lefkofsky courted controversy, too, by reportedly pulling out nearly $400 million during Groupon’s Series F round, leaving little working capital for the company.)
Still, the investment proved highly lucrative for Groupon’s earliest backers, including New Enterprise Associates, which invested $14.8 million in the company and still owned 14.6 percent of it when it made its public market debut. Little wonder that NEA was part of Tempus’s new $70 million round.
Revolution Growth, also named in today’s funding announcement, has also done well by backing Lefkofsky and Keywell, who jointly own Uptake, a Chicago-based predictive analytics company that has raised $85 million altogether from investors and is reportedly valued at $2 billion. It was founded just three years ago.
Both companies are owned 50-50 by Lefkofsky and Keywell, who graduated from law school together and have stuck together since, first launching a short-lived athletic apparel business called Brandon Apparel, before moving on to create Starbelly.com, a startup that sold promotional t-shirts and coffee mugs. (It was acquired for $240 million in 2000 by a company that filed for bankruptcy the next year.)
Others of their joint projects include the publicly traded companies InnerWorkings and Echo Global Logistics and the Chicago venture capital firm Lightbank, which has made investments in more than 100 companies, including the gigs marketplace Fiverr.
Certainly, the founders didn’t need to launch yet another company. But Tempus, now valued at $700 million, according to Forbes, seemingly represented an opportunity too big, and too meaningful, for Lefkofsky to resist.
Talking with the Chicago Tribune last year, Lefkofsky explained that he first gravitated to the idea after his wife successfully battled breast cancer several years ago. He said that during her treatment period, he found hospitals as far behind in their use of data as small merchants had been before the advent of Groupon.
Though Tempus faces plenty of competition, it’s chasing after a fast-growing and potentially highly lucrative market, too. The market for cancer and tumor profiling will reach roughly $60 billion within five years, according to some estimates.
There’s also Lefkofsky’s legacy to burnish. Reportedly worth $2.2 billion, he may not think twice about his reputation at this point. Still, given the high profile of Groupon and the controversy its rise (and subsequent slide) attracted, one imagines that switching gears might have appealed to him. Though he’s surely proud of Groupon, there’s nothing like creating another successful endeavor to remind people that you can.