When the food tech company Benson Hill had its IPO two years ago, it was a huge step forward for the St. Louis startup community.
“It was great timing for them married with a great time in the growth of their company,” said Phyllis Ellison, St. Louis Community College associate vice chancellor. “They were at a point of dramatic revenue and sales growth that made them attractive in the marketplace as well.”
Since then, venture capital has contracted a great deal.
Ellison
| Ellison
“Growth is going to be a bit slower and more intentional in terms of moving forward and getting into the marketplace,” Ellison told the St. Louis Record. “That's going to be one of the biggest factors in terms of limiting the growth of our startups right now.”
The Creve Coeur company initially received seed funding from the Missouri Technology Corp, which is funded by the state Missouri Department of Economic Development.
“They're kind of beyond venture capital right now,” Ellison said about Benson Hill. “They're big enough to be leveraging their debt differently and they're big enough to be working with larger investment syndicates. That’s a very different level.”
Earlier this month, the company announced its second quarter 2023 financial results.
“I hesitate to call them a startup anymore,” Ellison said in an interview. “They're on the stock exchange now. So, typically they would be relying on pulling money from their stock sales.”
Reported revenues were $109 million, an increase of $15.4 million, or 16.5 percent, according to a statement online, and gross profit was $3 million, a decrease of $2.8 million but operating expenses were $40.4 million, an increase of $8.1 million, which was driven by a $19.2 million impairment of the carrying value of goodwill.
“I continue to be impressed with our competitive advantages in technology, innovation pipeline, and the strength of the talent here,” said Deanie Elsner, Benson Hill interim Chief Executive Officer. “After nearly two months as interim CEO and more than four years on the Company’s Board of Directors, However, in light of the evolving market conditions, the time is right to initiate a broad strategic review to identify the most effective ways to unlock the Company’s full potential behind our technology platform and innovation pipeline.”
Overall, startups are on the rise in St. Louis, according to the 2023 State of the St. Louis Workforce report.
There were 15,313 startups in 2022 compared to just 14,884 in 2021.
"That surprises people because oftentimes they assume that when interest rates are up and economic times are challenging, that startups go away," Ellison added. "Historically, that is not the case. If it's a strong idea and the start up is solving a problem, they will move ahead with those companies."