Columbus’ Surge Behind the Rise of Ohio’s Venture Capital
Columbus startups are top performers in securing Ohio venture capital. Learn how talent and a bedrock of industries are driving momentum.
Transformative investments in the startup community are no longer restricted to Silicon Valley. Due in part to the pandemic and the ability to work remotely, many entrepreneurs and investors are relocating to mid-sized cities, taking their innovations and money with them. In the Columbus Region, venture capital plays a critical role in scaling startups across a spectrum of industries — from tech to healthcare to insurance to retail.
It’s no secret that 2020 was a record year for Ohio venture capital, and Columbus was a centerpiece of that success. The same held true in 2021 when five tech startups each acquired a venture funding round of $100 million or more. In comparison, the Region saw mega-rounds of similar strength only four times over the past two decades.
In July 2021 alone, it raised $621 million in venture funding, pushing the totals for Ohio venture capital toward $1.8 billion for the year. Strengthened by the Columbus Region’s record-breaking year, the state is poised to break last year’s record of $1.11 billion in venture capital.
As if the Region’s family of unicorns wasn’t enough, Columbus is home to many other startups raising funds at unprecedented speeds.
With the recent remarkable advancements in Columbus’ life sciences industry, most (two-thirds) of the Region’s VC funding went to health tech companies in 2020, compared to less than 50% in previous years. Nationwide Children’s Hospital (NCH), affiliated with The Ohio State University College of Medicine, frequently invests in local healthcare startups, including Insurify and Fortellix. In total. NCH has launched 16 companies between 2013 and 2021 — 10 in partnership with Rev1.
Local venture capital firms like Drive Capital and Rev1 Ventures have recognized Columbus’ potential, offering collaboration, guidance, and capital for promising early-stage startups and entrepreneurs. In fact, Rev1 Ventures — in partnership with The Ohio State University — has funded 13 exits with a combined value of $4.11 billion since 2016. Separately, Drive Capital touts $1.2 billion in assets under management.
Momentum with Unicorns
A prime example of the potential of Columbus startups to garner Ohio venture capital is the Region’s strong track record of raising unicorns. The Columbus Region is home to Ohio’s first unicorn, CoverMyMeds, a healthcare software company that was acquired by the McKesson Corporation for $1.3 billion in 2017. Since the acquisition, CoverMyMeds has nearly tripled in size with 1,400 employees in April 2020. In 2021, CoverMyMeds opened a $240 million, 218,000 square foot headquarters in Franklinton to accommodate the growth, with a second 200,000 square foot facility in development for 2022.
After dual rounds of $106 million and $226 million, Olive AI (a Drive Capital portfolio company) joined the Region’s growing ranks of homegrown unicorns. In June 2021, Olive AI raised $400 million — the highest valuation in Ohio history — which has raised the company to a $4 billion valuation.
Leading VC Funding Rounds in the Market
Other companies that have received mega-round funding in the Region include Battelle’s cell and gene therapy spinoff AmplifyBio with $100 million raised; digital lending platform Lower with $100 million raised; and the gene therapy company Forge Biologics Inc. with $120 million raised.
Forge Biologics’ $120 million Series B financing round was Ohio’s largest Series B to date, with the financing led by RA Capital Management. Forge plans to add 200 new jobs by 2023 and will use proceeds from the funding round to advance gene therapy programs at its subsidiaries — including a proprietary line of novel gene therapies.
“We are confident that Forge’s experienced team will become the trusted partner of innovative therapeutics companies, working collaboratively with clients to successfully deliver AAV manufacturing solutions,” said Matthew Hammond, Ph.D., principal at RA Capital Management.
Most recently, cybersecurity startup Finite State raised $30 million in a Series B funding round led by Energize Ventures located in Chicago. Loop, a platform aimed at automating the process of eCommerce returns into exchanges, has raised $65 million in a Series B funding round, which included 24 investors. More than 700 brands on Shopify currently use Loop and this new funding will allow the startup to hire more engineers, marketing, and salespeople.