• Boeing Contracts Demonstrate St. Louis’ Continued Strength for Aerospace Manufacturing

    Oct 19, 2018

    Greater St. Louis is a major hub for aerospace manufacturing, research, and development. Boeing Defense, Space, and Security is the largest regional manufacturer with over 13,000 area employees. In August and September 2018, Boeing won two major contracts that total $10 billion, further deepening their connection to Greater St. Louis.

    In August, Boeing won a $805 million contract to develop four unmanned drones—the MQ-25A Stingray—which will be used to refuel fighter jets and extend their combat range for the U.S. Navy. These drones can travel 500 nautical miles to deliver 14,000 pounds of fuel (1), which is a technological breakthrough in U.S. Navy history. Approximately 45 percent of development will be done here in St. Louis according to the U.S. Department of Defense, and delivery is expected by 2024.(2) There is the potential for the Stingray program to grow into a $13 billion fleet of 72 drones if the first round of four drones prove satisfactory to the U.S. Navy.

    Their next victory secured a $9.2 billion contract with the U.S. Air Force to produce the next generation of T-X training jets. The current plan calls for 351 T-X aircraft and 46 simulators, however, the award can cover up to 475 T-X jets and 120 simulators and associated ground equipment.(3)

    The first five T-X aircraft and seven simulators will arrive at Joint Base San Antonio-Randolph, Texas, in 2023. Initial operating capability is planned to launch by the end of 2024, and full operational capability by 2034.This contract is expected to generate over 1,800 jobs throughout the Greater St. Louis region.(4)

    As employers increasingly seek a skilled workforce, these contracts validate that St. Louis can compete and win in advanced manufacturing. St. Louis continues to be a world-class center for advanced design and manufacturing of fighter aircraft.


    (1) "Navy Enters Drone Age, Taps Boeing for MQ-25" Breaking Defense, August 30, 2018
    (2) "Boeing wins $805 million U.S. contract to build drones" St. Louis Business Journal, August 31, 2018
    (3) "US Air Force awards $9B contract to Boeing for next training jet" Defense News, September 27, 2018
    (4) "Boeing wins $9.2 billion Air Force training jet contract, will drive 1,800 local jobs" St. Louis Business Journal, September 27, 2018

  • St. Louis Regional Chamber Releases 2017 Investment Capital Report

    Aug 01, 2018

    The St. Louis Regional Chamber today released its 2017 Greater St. Louis Venture Capital Overview report. Each year, the St. Louis Regional Chamber compiles and publishes data on venture capital investment in the region with the objective to provide innovation ecosystem partners with a comprehensive statistical overview of the “State of Venture Investment” in the St. Louis MSA, and to put some of those numbers into a comparative and historical context. According to the report, presented by St. Louis Regional Chamber VP Entrepreneurship & Innovation Andrew G. Smith, in 2017, the greater St. Louis region maintained its strong momentum as a Midwestern hub for startups and venture capital. However, the next few years will likely be a critical time as many startups work to scale their businesses and seek next stage funding.

    The region continued to see significant inflows of risk capital as well as growth in the number of new firm births. St. Louis now ranks as #3 among Midwestern cities for startup activity. The modern era of venture investment in St. Louis began sometime around 2013, coinciding with the launch of the St. Louis Regional Chamber’s Accelerate STL Capital Initiative.

    While Greater St. Louis continues to rank among the top Midwestern cities for startups, there are some troubling trends in the data. The number of VC funded deals has fallen by almost two-thirds since peaking in 2015, and the average deal size has ballooned from under $2MM as recently as 2012 to $7MM in 2017 with the median deal size following a similar trend. This slight downtrend in our market contrasted with an overall increase in US venture capital investments, which reached $82.4Bn in 2017.

    Smith says the regional innovation ecosystem is at an inflection point. Over the last decade, investors have directed billions of dollars into high-potential startups. While there have been a few early exits during that period (e.g., Confluence Life Sciences in 2017), most of the startups that received funding are still scaling their businesses. To the extent that a sufficient number succeed, the region will see re-investment of proceeds into the ecosystem, increased confidence and appetite for risk, job growth, and talent attraction. The alternate outcome is that too many startups could fail, leading to a depletion of risk capital, a loss of confidence, job loss, and talent out-migration.

    "The next several years will be critical to the long-term success of the greater St. Louis startup economy," Smith says.

    There are some underlying structural challenges facing the ecosystem, including (but not limited to):

    • Heavy concentration in bioscience investment
    • A steady trend towards larger, later-stage investments (and away from early-stage seed investments)
    • A decrease in the number of deals being funded

    "In order to sustain momentum, the region must continue to support existing startups while also funding new ones," says Smith.  "We must push for meaningful and sustainable levels of state funding for innovation activities. We must continue celebrating successes and supporting the organizations that serve as the 'aquifers' of innovation."

    “As highlighted in recent national studies by the Brookings Institution and JPMorgan Chase, the bioscience cluster is of central importance in St. Louis’ innovation economy; and as reflected in the Regional Chamber’s report, venture capital success in bioscience startups has driven St. Louis’ rising status overall in the rankings,” said Donn Rubin, President and CEO of BioSTL.

    Groups like Arch Angels, Arch Grants, BioGenerator, the St. Louis region’s array of Accelerators, and the Chamber-led Spirit of St. Louis Fund 1 continue to deploy capital into early stage companies and represent the vital “aquifers” of the entrepreneurial ecosystem.

    “We appreciate the attention this report helps to shine on the importance of Arch Grants and other local organizations that support early stage entrepreneurship in our region,” said Emily Lohse-Bush, Executive Director of Arch Grants. “Arch Grant companies represent a significant percentage of successful startups in our region and will continue to create high-paying jobs and opportunities in the coming years.”

    “The Regional Chamber’s report shows how far the St. Louis startup ecosystem has come in the last decade.  We have clearly established ourselves as one of the top innovation hubs in the Midwest, said Brian Matthews, Managing Partner of Cultivation Capital. “In order to sustain the momentum, we will need to re-dedicate ourselves to the work of supporting early stage ventures.”

    Read the full report.

    Read the executive summary

    Read the 2017 Greater St. Louis Venture Capital Overview Supplemental Report: The Emerging Agtech Boom