“The year of validation.”
That’s how Cliff Holekamp, co-founder and general partner of St. Louis venture capital firm Cultivation Capital, sums up 2021.
It’s a descriptor given to St. Louis’ entrepreneurial economy thanks to a year marked with several significant exits, including two of its most prominent startups becoming public companies. For Holekamp and others who have been deeply involved in building out St. Louis’ startup sector in the past decade, the string of exits in 2021 offers proof their work is paying dividends.
“Early on, there were some people that were skeptical if St. Louis could ever get critical mass with a true entrepreneurial economy. I don’t think anybody questions that anymore. And 2021 is a big reason why,” Holekamp said.
The biggest St. Louis startup exits in 2021 involved Nerdy (NYSE: NRDY), the parent company of Clayton-based online learning company Varsity Tutors, and food technology firm Benson Hill (NYSE: BHIL) — both arguably the region’s highest-profile startups within the past decade — becoming public companies through mergers with special purpose acquisition companies (SPAC). The SPAC deals valued each company at more than $1 billion, making both so-called “unicorns.”
The exits of Benson Hill and Nerdy also highlighted the role of local institutions and investors in the development of each company.
In the case of Nerdy, its exit put a spotlight on Washington University. Nerdy founder, Chairman and CEO Chuck Cohn launched the company in 2007 as a student at WashU after having difficulty finding a tutor for one of his courses. Meanwhile, Benson Hill’s deal notched a win for several local investors, with the company receiving instrumental funding and support in its early days from BioSTL and Missouri Technology Corp. and later backing from venture capital firms iSelect Fund, Cultivation Capital and Lewis & Clark Ventures, among others.
In addition to the exits of Benson Hill and Nerdy, 2021 also included several acquisitions of St. Louis startups. That’s come amid a red-hot, record-setting global M&A market that has included more than $5 trillion worth of deals in 2021.
2021 Startup Exits
SCROLL THROUGH THE GALLERY ABOVE TO SEE WHICH ST. LOUIS STARTUPS HAD EXITS IN 2021
In a sign of momentum for St. Louis’ entrepreneurial ecosystem, two local startup sales involved entrepreneurs who have already had exits with other local companies. Jim Eberlin's startup TopOPPS, which provides sales pipeline management and forecasting software, sold to San Jose-based software firm Xactly Corp. That marked a “hat trick” for Eberlin, who also experienced exits with his St. Louis-born startups Gainsight and Planful. The sale of e-commerce startup OneSpace to London-based Ascential gave Stephanie Leffler her second exit. In 2006, she sold another St. Louis e-commerce startup, MonsterCommerce.
Exits aren't the only indicator that St. Louis' entrepreneurial ecosystem had a robust 2021.
It also is set to be a strong — and potentially record-setting — year for venture capital investment in St. Louis startups. Through the first three quarters of the year, St. Louis startups raised $374.9 across 44 deals, according to data from PitchBook and the National Venture Capital Association. Local firms raised $256.8 million for the quarter ended Sept. 30, the highest total of funding in a single quarter since local firms raised $302.7 million in the third quarter of 2018.
