A report released today is touting the emergence of St. Louis as tech startup hot-spot.
ITEN, a non-profit that provides programs, events and access to resources for area startups produced the report. It collected data from more than 350 area startups and evaluated the health of the industry by looking at a variety of measures, including the amount of funds raised, current monthly revenue and the number of employees.
Optimistic Outlook:
It’s mostly good news, according to Jim Brasunas, executive director of ITEN. He says all of the disparate things that startups need to succeed are finally gelling in St. Louis. It’s no longer the case that there is one facility in one area providing space to entrepreneurs, and one organization that provides funding. There are dozens of options for startups for funding, access to resources, investors and educational support that is turning St. Louis’s tech scene into a true community.
Some of the numbers that prove ITEN’s case include:
- From 2012 to 2013, the cumulative total of money invested in the 350 companies that participated in ITEN’s study grew from $70.6 million to $137.3 million
- Companies are looking to add nearly 260 positions in the first six months of 2014, compared to 185 positions for the first six months of 2013.
- More than one-third of the tech businesses were created by people from outside of Illinois and Missouri
Credit (courtesy of ITEN)This chart shows the network of components that are helping St. Louis' startup community grow. Funding, facilities and community support have grown to the point that St. Louis is gaining a reputation for being a good place for entrepreneurs.
Challenges Remain
No one is saying that St. Louis’ tech scene is on par with Boston or Silicon Valley. There is plenty of room for improvement, Brasunas said. The top challenge making sure local startups have access to second-round funding so they can compete with West Coast firms.
Brasunas said access to second stage funding is the next thing that needs to fall in place for St. Louis to continue to grow its IT sector.
"If we had only one or two companies every once in a while getting to a point where second round funding would be appropriate for them, we probably would stand a good chance of losing most of those," Brasunas said. "But the number of companies that are in the need of the next round of funding are more likely to have much more dramatic and positive impact which I think is going to be the advent of large investors taking route in St. Louis or coming here from other places."
Brasunas also said schools and universities need to do a better job preparing students for high tech jobs. But, he said, that's a national, not regional, issue.
