The venture capital landscape has often exhibited a fluctuating interest in the Midwest, with investors gravitating towards the region during prosperous times and retreating to coastal hubs during downturns. Columbus, Ohio-based Drive Capital has navigated this ebb and flow, facing its own internal challenges, notably a co-founder split that, rather than hindering the firm, appears to have fortified its position.
A Remarkable Financial Milestone
In May 2025, Drive Capital achieved a significant feat by returning $500 million to its investors within a single week. This impressive distribution included nearly $140 million in shares from Root Insurance, alongside proceeds from the sales of Austin-based Thoughtful Automation and another undisclosed company. Such a substantial liquidity event is rare in the current venture capital environment. Chris Olsen, Drive’s co-founder and now sole managing partner, remarked, I’m unaware of any other venture firm having been able to achieve that kind of liquidity recently.
Overcoming Internal Challenges
This financial success marks a significant turnaround for Drive Capital, which faced existential questions three years prior when Olsen and co-founder Mark Kvamme parted ways. Both former partners at Sequoia Capital, their unexpected split led Kvamme to establish the Ohio Fund, a diversified investment vehicle focusing on the state’s economic development, encompassing real estate, infrastructure, manufacturing, and technology investments.
A Contrarian Investment Strategy
Drive Capital’s recent achievements can be attributed to its deliberately contrarian investment approach. In an industry often fixated on unicorns and decacorns—companies valued at $1 billion and $10 billion, respectively—Drive Capital has chosen a different path. Olsen highlighted the rarity of massive outcomes, noting that in the past two decades, only 12 companies in America have surpassed $50 billion valuations. In contrast, there have been 127 IPOs at $3 billion or more, along with hundreds of mergers and acquisitions at that level. If you’re able to exit companies at $3 billion, then you’re able to do something that happens every single month, Olsen explained.
Strategic Exits and Portfolio Highlights
This investment philosophy was exemplified in the sale of Thoughtful Automation, an AI healthcare automation company. Despite being valued below $1 billion, the exit was described by Olsen as near fund-returning. The company was acquired by private equity firm New Mountain Capital, which integrated it with two other entities to form Smarter Technologies. Drive Capital held a significant ownership stake in Thoughtful Automation, a common scenario for the firm, which often serves as the sole venture investor in its portfolio companies. Approximately 20% of Drive’s current portfolio consists of businesses where it is the exclusive venture backer.
Drive Capital’s portfolio boasts notable successes, including early investments in Duolingo, the language-learning platform now trading on NASDAQ with a market cap nearing $18 billion, and Vast Data, a data storage platform last valued at $9 billion in late 2023. The firm also profited from its investment in Root Insurance, despite the company’s challenges in the public market since its late 2020 IPO.
However, not all investments have been successful. Olive AI, a Columbus-based healthcare automation startup that raised over $900 million and was once valued at $4 billion, eventually sold portions of its business in a fire sale.
Focusing Beyond Silicon Valley
A distinguishing factor for Drive Capital is its focus on companies operating outside Silicon Valley’s competitive ecosystem. The firm has established a presence in six cities—Columbus, Austin, Boulder, Chicago, Atlanta, and Toronto—and supports founders who might otherwise have to choose between proximity to customers and investors. Olsen emphasized that early-stage companies based outside Silicon Valley often face higher standards to attract venture investment, a dynamic that Drive Capital leverages to identify promising opportunities.
Drive Capital also favors startups applying technology to traditional industries, investing in sectors such as autonomous welding and next-generation dental insurance. This approach taps into America’s $18 trillion economy beyond Silicon Valley’s tech-centric focus.
Future Prospects and Industry Validation
The firm’s momentum has attracted significant interest. In April 2024, Drive Capital sold a minority stake to Collective Global, which committed to investing $750 million in future Drive Capital funds. This partnership underscores confidence in Drive’s investment strategy and its potential for sustained success.
Drive Capital’s thesis about Columbus as a legitimate tech hub received further validation when tech luminaries like Palmer Luckey and Peter Thiel announced plans to launch Erebor, a crypto-focused bank headquartered in Columbus. Reflecting on the firm’s journey, Olsen noted, When we started Drive in 2012, people thought we were nuts. Now you’re seeing literally the people I think of as being the smartest minds in technology—whether it’s Elon Musk or Larry Ellison or Peter Thiel—moving out of Silicon Valley and opening massive presences in different cities.
Conclusion
Drive Capital’s journey illustrates the potential for venture firms to thrive by embracing unconventional strategies and focusing on underrepresented regions. By prioritizing substantial, yet attainable, exits and supporting companies outside traditional tech hubs, Drive Capital has not only weathered internal challenges but has also positioned itself as a formidable player in the venture capital landscape.
