Posted: Thursday, January 22, 2015 12:00 pm
By Benjamin Akande
St. Louis increasingly is being recognized as a Mecca for enterprising and innovative business owners. In recent months, major news outlets, including The Wall Street Journal, Forbes, TechCrunch and MSNBC have all hailed the Gateway City as the destination for startups.
Indeed, the number of companies opening shop or raising capital to get off the ground has almost doubled in the last two years, according to the St. Louis Regional Chamber of Commerce. This is due, in large part, to a supportive environment that offers plenty of access to mentoring, networking, Arch grants and new venture funds.
The Ewing Marion Kaufmann Foundation reports that Arch grants played a key role in creating a community of entrepreneurs. These entrepreneurs received small grants and also were connected with local support organizations. As of July 2014, the report notes that 20 recipients of these grants had created 104 jobs, generated more than $2.8 million in revenue, and raised more than $17 million in investment.
This is just a taste of many, many wonderful things to come this year and in the coming years in the commercial life of the St. Louis metropolitan area.
The following is a handful of budding companies that exemplify the prosperous years ahead for the St. Louis region and ought to be watched closely in 2015:
• This promises to be an exciting year for BacterioScan, a locally based company that offers microbiology diagnostic systems for rapidly detecting infection and antibiotic susceptibility and resistance. The company plans to roll out its first clinical application of rapid screening of urine specimens for bacterial urinary tract infection (UTI) during the second quarter of this year. This clinical, global market segment is booming, and is projected to exceed $10 billion by 2017.
Adoption of this new technology will reduce costs and delay in diagnosis, and is expected to reduce the unwarranted use of antibiotics in treatment of UTI. Leading research organizations such as the U.S. Centers for Disease Control, St. Jude’s Children’s Research Hospital, UCLA Medical School, and the U.S. Army Medical Institute have begun trials to use the company’s platform for rapid measurement of antimicrobial resistance and susceptibility. It is expected that this will provide valuable guidance in diagnosing bacterial infections and other related diseases. It also will help address the growing challenge of drug-resistant pathogens.
• Total Hockey & Lacrosse, a one-stop store and online retailer specializing in hockey and lacrosse sports markets, is raising capital in the private markets to propel its next round of rapid growth. In recent years, the St. Louis-based company has expanded to 24 stores in seven key markets, including Detroit, Chicago, Philadelphia, Washington, D.C., and Minneapolis. Annual revenues currently hover at about $60 million. With its new infusion of capital, Total Hockey plans to establish 85 stores in 20 key U.S. markets by the year 2020.
Like BacterioScan, Total Hockey & Lacrosse has been smart about developing its playbook for strategic growth. The future looks bright for this specialty retailer. Participation in lacrosse has risen steadily in recent years: Almost 750,000 young people played organized lacrosse in 2013, according to U.S. Lacrosse. And USA Hockey reports that a record number of people now play hockey across the country, increasing by 16 percent over a 10-year period.
• Last fall, CIC@4240, a company that provides flexible working space for startups and emerging businesses, opened its first location outside Massachusetts in St. Louis’ innovation district. CIC@4240 was attracted to the Gateway City for St. Louis' reputation as a destination for entrepreneurs. It appears the company’s instincts were spot on. Just weeks after the company opened its 32,000-square-foot building on Duncan Avenue, it had already had 20 tenants, including Washington University, Boeing Ventures Group and Husch Blackwell. Company officials are confident that all 70 spaces will be occupied within 12 to 18 months of opening.
• T-REX is another critical player in the St. Louis ecosystem. The co-working space and technology incubator, which provides startup entrepreneurs with affordable space and offers the community useful programming, now occupies five floors of The Lammert Building on Washington Avenue. T-REX currently has more than 100 tenants, a number that continues to rise steadily.
• Cultivation Capital is another critical element in the region providing significant funding support to financial services and technology startups. Building on a $20-million investment fund initiated in 2012, it plans to double that through a newly created fund targeting 20 additional startup companies. One of the most active seed venture capital firms in the Midwest, Cultivation Capital provides a significant resource in keeping St. Louis vibrant as the destination for startups.
The future looks bright for all of these companies –and for our region.
Benjamin Ola. Akande is a professor of economics and dean of the George Herbert Walker School of Business & Technology at Webster University.