In a recent ranking from Forbes, the city of St. Louis was included in a group of emerging startup cities “poised to thrive in the decades ahead.” The prestigious global media company ranked St. Louis at No. 2, just behind Columbus, Ohio. Other cities in the top five were Atlanta, Denver, and Baltimore.
To create the list, Forbes and Washington, D.C.-based venture capital firm Revolution took a quantitative approach to identify ten rising cities that could serve as ideal environments for startups in the next few decades. They used 13 criteria which take into account a range of factors such as education, cost, entrepreneurship rates, venture capital investment, and working-age population growth.
They excluded ten metro areas which have attracted the most venture capital over the last three years. Apart from major cities located on the east and west coast, established hubs that were eliminated from the list included Chicago and Austin, TX.
Forbes notes that the cost of running a business in St. Louis is 8% below the national average, and that for the last three years, the value of venture capital investments in St. Louis is up to 90%.
Landmark venture capital deals
Two of the largest venture capital deals for St. Louis startups happened this September.
Benson Hills Biosystems raised $60 million in a Series C venture capital financing round led by GV (formerly Google Ventures), the venture capital investment arm of Alphabet, Inc.
Galera Therapeutics, a clinical-stage drug discovery company, raised $150 million, considered the biggest Series C raise from a St. Louis-based bioscience company.
Building on St. Louis’ growing startup scene
In the past several years, state and local government, investors, financial institutions, civic leaders, and entrepreneurs have banded together to help St. Louis establish one of today’s fastest growing startup scenes.
Community leaders have made great strides towards fulfilling this goal with accomplishments that include:
- Founding Arch Grants, an organization that has provided equity-free funding amounting to over $6 million to 114 startups.
- Establishing a number of thriving incubators extending St. Louis’ urban core towards the western suburbs.
- Creating a $5 million fund to assist early stage startups.
- Establishing several unique and thriving venture funds.
- Developing well-funded startup competitions such as the St. Charles County Demo Day and the Ameren Accelerator Demo Day.
St. Louis has even caught the attention Facebook CEO and founder Mark Zuckerberg, who made the city his first stop on a nationwide tour designed to reach out to small business owners and entrepreneurs. The city’s innovation community has also put St. Louis in a position to become a location for the world’s first-ever Hyperloop, which could potentially link the metro area to Kansas City, another budding tech community.
While early results are very promising, return on St. Louis’ investment on startups are still several years away. But if you think about, even the mighty Silicon Valley started out as a chain of garages used by software engineers to fulfill their digital dreams.
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