Two St. Louis bioscience startups announced major seed funding rounds in late July, with Aurenar raising $5.7 million and Pairidex securing $4.89 million. Both companies attracted more investor interest than the amount of money they initially sought, a promising sign for businesses at different stages of bringing new health technologies to market.
Aurenar, a medical device company founded in 2024 by neurosurgeon Dr. Eric Leuthardt, will use its funding to advance a noninvasive neuromodulation platform toward a pivotal clinical trial. Pairidex plans to put its new capital toward the commercial launch of FusionMRD, a blood-based test designed to detect extremely low levels of residual disease in patients with certain leukemias.
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The deals also illustrate a broader challenge for St. Louis. The region has added more sources of money for young companies, but bioscience startups frequently have to look elsewhere when their financing needs climb into the tens of millions of dollars.
From Grants to Growth
Aurenar’s financing started well before the company was formed. Leuthardt had been studying noninvasive ways to interact with the nervous system when he became interested in the vagus nerve, which helps regulate inflammation. One branch reaches the ear, offering a potential way to stimulate the nerve without surgery. Leuthardt and Dr. Anna Huguenard, who was then a neurosurgery resident at WashU, began testing whether stimulating that branch could reduce inflammation in patients recovering from a subarachnoid hemorrhage, a type of bleeding around the brain that’s typically caused by a ruptured aneurysm.
An R21 grant from the National Institutes of Health helped launch an early clinical trial, followed by additional foundation support. The early results persuaded Leuthardt that the research could support a company. “The interim results were incredibly compelling,” he recalls. “I was like, ‘Oh my gosh, we really have something here.’”
BioSTL’s BioGenerator was among Aurenar’s earliest financial backers, providing capital that Leuthardt says was “absolutely critical” to forming the company.
That progression is familiar to Gabe Angieri, the outgoing executive director of Arch Grants. Bioscience companies emerging from universities and research institutions often piece together federal, state, university, and other non-dilutive funding before they are ready to pursue venture investment.
The pipeline remains active. In early August, Arch Grants brought 70 startups before expert judges for its annual finalist pitch day, the culmination of its flagship startup competition. Angieri says 10 to 12 of the companies pitching were early-stage bioscience businesses, including startups that were still well before generating revenue or clearing regulatory hurdles.
Arch Grants supports companies from the post-idea stage through pre-Series A and provides non-dilutive funding, meaning founders do not give up ownership in exchange for the award. Since 2012, the organization has provided just over $20 million to 291 companies, Angieri says. Those businesses have reported more than $1.4 billion in revenue and raised more than $920 million in follow-on capital.
Arch Grants hopes those awards translate into economic impact for St. Louis, but its involvement does not end when the money is awarded. Angieri says the organization continues providing founders with support and programmatic resources for as long as they are building their companies in the region.
That support can include connections to investors and potential customers, access to subject-matter experts and co-working space, and follow-on funding opportunities. For Arch Grants, the larger goal is to help companies create jobs, expand facilities, generate revenue, and contribute to the region’s economy.
Other public funding can help companies reach the point where private investors are willing to step in. Depending on the technology, bioscience startups may pursue support from federal agencies including the NIH, U.S. Department of Agriculture, and Department of Defense. State-backed programs such as the Missouri Technology Corporation provide another potential source of early capital.
From Testing to Market
Pairidex is using its new funding at a later stage.
The St. Louis precision diagnostics company has made FusionMRD commercially available through its CAP-accredited and CLIA-certified laboratory. Its $4.89 million round will support additional clinical studies, laboratory operations, commercial expansion, and continued development of its molecular diagnostics platform.
FusionMRD is designed to detect measurable residual disease, or MRD, in patients with certain blood cancers. Pairidex is initially focusing on acute myeloid leukemia, an aggressive blood cancer, and says its test can detect residual disease using a peripheral blood sample, reducing reliance on more invasive bone marrow biopsies.
The two seed rounds are financing different stages of growth: Pairidex is expanding a test already on the market, while Aurenar is preparing for a clinical trial that will require additional capital to conduct.
“Once you get to the institutional investment,
it’s a whole other level of rigor in which you are
scrutinized as a company and your potential.”
Winning Over Investors
For Aurenar, the latest round represented a shift from early backing toward institutional venture capital—and a new level of scrutiny.
“Once you get to the institutional investment, it’s a whole other level of rigor in which you are scrutinized as a company and your potential,” Leuthardt says.
The round was co-led by the American Heart Association Ventures’ Go Red for Women Venture Fund and Solas BioVentures, with participation from BJC Healthcare and Kaleida Capital. Those investors examined Aurenar’s human data, market opportunity, leadership, intellectual property, and development plans, Leuthardt says. The U.S. Food and Drug Administration’s June 30 breakthrough device designation for Aurenar’s V-Link platform strengthened the company’s case as it sought investment.
“It’s a clear validation of the importance of the technology and the legitimacy of the evidence for the possibility of this being impactful to patients,” Leuthardt says.
The designation can also give Aurenar more frequent communication with the FDA as it prepares its clinical and regulatory strategy, reducing uncertainty about what will be required to move the device toward approval.
Yet academic spinouts can face another hurdle: The people who developed the science do not always have experience raising venture capital, navigating regulatory systems, or bringing products to market. “They need to bring in people with more business expertise before they can raise serious capital in most cases,” Angieri says.
Even with the right team, however, there are plenty of ways for bioscience investors to lose their bets. Clinical trials can fail to produce the necessary results, regulatory requirements can change, and competitors can reach the market first. Some companies require tens or hundreds of millions of dollars before reaching the market.
“There are just so many points of failure,” Angieri says.
“This is a very affluent region. We just don’t have a ton of
risk capital available for earlier growth-stage start-ups.”
The Limits of Local Capital
For Angieri, the question is not simply whether St. Louis companies can raise money. While it has become easier for startups based in the region to access capital, that doesn’t necessarily mean the investors supplying it are based here. Angieri would like to see more sources and types of investment capital within St. Louis.
“I think we need more diversity of capital in St. Louis for this region to really hit the next stage of growth,” he says.
St. Louis has a number of locally based venture capital firms, such as RiverVest Venture Partners, Lewis & Clark Partners, and Cultivation Capital, along with St. Louis Arch Angels, which helps support startups that are at earlier stages. A deeper pool of investors could give founders more financing options as their companies grow.
“This is a very affluent region,” Angieri says. “We just don’t have a ton of risk capital available for earlier growth-stage startups.”
Medical device companies can encounter a particularly steep jump in financing needs. Leuthardt says that once companies begin seeking checks of $15 million or more, they often turn to investors on the coasts, particularly for follow-on rounds. “That’s the problem, and that is a deficit,” he says.
The national market has become more difficult for medical device companies as well. Clinical trials and FDA review can create longer waits for returns than some other investments, while artificial intelligence companies are attracting substantial investor interest with the potential to reach markets more quickly.
Some venture funds are also still waiting for companies that they backed during the investment surge of 2020 and 2021 to be acquired or reach other exits that return capital to investors, Leuthardt says, limiting available funds for new investments.
Aurenar’s latest investors, however, offer another important aspect that the company will need to grow. “They have extraordinary access to important connections and networks that help the company,” Leuthardt says. The Go Red for Women Venture Fund and Solas BioVentures can connect Aurenar with clinical experts, industry leaders, and potential future investors—relationships that could become particularly important when the company returns to the funding market.
Leuthardt expects the round needed to conduct Aurenar’s pivotal trial to be larger than the $5.7 million that it just closed, pushing the company further into the national capital market.
For Angieri, that trajectory reflects both how far St. Louis’ startup ecosystem has come and the room it still has to grow.
“There is more capital at play than in previous years,” he says. “But it’s still at a much smaller scale than what you would find in larger markets and on the coasts.”
St. Louis Magazine’s “Spotlight on Bioscience” series is supported by BioSTL, a St. Louis–based nonprofit dedicated to turning the region’s world-class research strengths into high-growth startups, a skilled workforce, and a globally recognized innovation hub.
