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Ohio's venture capital boom lures startup founders

Data: PitchBook; Chart: Andrew Witherspoon/Axios

Venture capital investments in Ohio more than doubled in five years, and the increased availability of funding is helping attract a new crop of startup founders.

Zooming in: Columbus in particular is experiencing a mini-renaissance as technology is disrupting legacy industries such as manufacturing, insurance, financial services, retail and health care.

  • Columbus-based Drive Capital, one of the biggest VC firms in the region led by two Sequoia Capital alums, raised $350 million for its third venture fund this year. It’s backed companies like Root Insurance, which is now valued at $3.65 billion after a $350 million funding round (Ohio’s largest-ever VC funding round).

Connected cars: Arnab Nandi, 36, spun his company Mobikit, a data infrastructure platform for connected vehicles, out of The Ohio State University, where he is on leave from the faculty.

  • Being three hours away from auto-focused hubs of Detroit and Pittsburgh make Columbus ideal, he said. And he can recruit recent OSU grads.
  • "It's about giving those young professionals a reason to stay and not think that they have to move to California to start a tech career," he said.

Insurance: Steve Lekas, 38, worked at insurance companies in New York and San Francisco. When he co-founded Branch, which lets consumers bundle low-cost home and car insurance, he and his co-founder settled on Columbus after analyzing more than 80 cities. He's relocated six employees there and has since hired five more.

  • It came down to the cost of living and types of talent available. Columbus is home to several major insurance companies.
  • "I couldn’t find any real benefit to us being in the Bay Area," he said. "But I could see how the price we put in front of consumers was higher as a result in a very price-sensitive marketplace."
  • Branch has raised $8.5 million from Bay-area-based VC Foundation Capital, New York-based Greycroft and Revolution’s Rise of the Rest Fund, which also invested an undisclosed amount in Mobikit.

Go deeper: How Ohio boosted venture capital investment