In 2012, the same year that Ohio State and Ohio University pooled $35 million to create a venture capital fund, Ohio State also invested $50 million in the first fund of Columbus-based Drive Capital LLC.
The Columbus firm has grown to $1.2 billion under management, making it the largest active VC firm in the Midwest. And according to regulatory filings indicating it's raising new funds, that could soon double.
"We’re still feeling pretty good about (Drive)," Ohio State CFO Mike Papadakis said. "We’re still happy with the strategy there."
The value of Ohio State's holdings skyrocketed in October 2020, when Drive-backed Root Inc. went public at $27 a share – but the stock has since plummeted to less than $2. Drive has distributed about half its Root shares to all its limited partners; what they in turn do with them is not disclosed.
Portfolio company Duolingo also had an IPO last year, and in the recent bear market its shares are about half that starting price. Drive owned less than 5%, so its holdings aren't in Duolingo regulatory filings.
"There are other companies in their portfolio that have yet to be monetized," Papadakis said.
Several of those are in Columbus, including Beam Dental, Forge Biologics, Battleface, Finite State, Olive AI, Path Robotics, Ready Robotics and Physna.
"It’s definitely going to hit the return thresholds we set out up front," Papadakis said. "Whether it's a grand slam like it looked in October (2020), we will see over time.
"The markets will do what they do, and we'll see how things play out over the next couple years."
Universities are conservative investors, OU President Hugh Sherman said, but over the past decade investment best practices have called for putting at least 5% of holdings in VC, private equity or similar funds.
Both schools are happy with the performance of Ohio Innovation Fund, as I reported in a related story. They created the fund in 2012, but it didn't start investing until 2016.
The net asset value of all of the OU Foundation's investments in that category rose to $68 million in the year ended June 2021, according to its audit, from $41 million the prior year.
Overall, $1.4 billion of Ohio State's $7.2 billion long-term investment pool is in private equity, which includes venture capital, for the year ended June 2021, according to its audit.
Ohio State also invests in earlier stage startups through funds it backs at Columbus' Rev1 Ventures.
The past decade of concerted effort and capital attraction have contributed to a strong tech startup community in Central Ohio, the officials said, which creates opportunities for faculty to create spinoffs and students to find internships and jobs.
