Drive Capital LLC invests where the vast majority of VCs don't – and now it has $1 billion more to do so.
Over the past decade, the Columbus, Ohio-based venture capital firm has invested throughout the Midwest, participating in multiple rounds for Pittsburgh companies. Now it says it's looking for high-growth technology companies "between the Hudson River and the Rocky Mountains."
Drive on Tuesday announced the closing of two new funds, but did not enumerate them. The firm now has $2.2 billion under management.
In December, Columbus Business First reported the firm's regulatory filings and public documents from investors indicated it was raising a $600 million second Overdrive Fund for later-stage technology companies and a $350 million to $400 million Fund IV in its traditional seed and Series A space.
Mark Kvamme and Chris Olsen, veterans of Sequoia Capital in Silicon Valley, founded Drive in Columbus in 2013, and still follow the same investment thesis: Build tech companies in the middle of the country, where they have the best access to the majority of U.S. engineering graduates and Fortune 500 customers – and where Drive has little competition from coastal VCs to get in at the earliest stage.
"We believe that our capital, expertise and relentless work ethic can untap billions of dollars of value," Olsen said in a release. "We are proving our ‘Driveway’ thesis out, and our two new funds position us to take founders even farther over the next 10 years."
Partners were not immediately available for comment.
"It is critical that venture firms have the resources to follow their convictions and readily provide their portfolio companies with more capital when they need it the most," Partner Molly Bonakdarpour said in the release.
Central Ohio companies in Drive's portfolio accounted for $983 million of the region's record $1.4 billion in VC raised in 2021. The region made up more than half of the $2.3 billion raised statewide – but Ohio still remains stuck at less than 1% of U.S. VC investment.
Two Drive companies have had IPO's – Columbus-based Root Inc. and Pittsburgh-based Duolingo Inc. – although both stocks have struggled since.
Drive is also a repeat investor in Pittsburgh-based Gecko Robotics, leading its $40 million Series B round in late 2019 and participating in the $73 million Series C announced in March.
The firm's latest unicorn is Immuta Inc., valued at $1 billion in a $100 million round this month. The Boston cybersecurity startup is expanding the Short North office it opened five years ago.
Pension funds started investing in Drive's new funds last summer, according to meeting minutes.
Drive's Columbus limited partners from its first funds include Huntington Bancshares Inc. and Ohio State University. It was not yet clear if they joined these latest funds.
"We’re still feeling pretty good about (Drive)," OSU CFO Mike Papadakis told Business First in May. "We’re still happy with the strategy there."
