by Anne Szustek Talbot, director of content, BX3 Capital
Later this week, a Chinese delegation including members of the Yao Ming Foundation will be winding down a four-city tour of the US. After visiting Los Angeles, Las Vegas, and Chicago, the group, whose mission is to point out that US-China cross-border venture capital opportunities are impermeable to geopolitical winds, are ending their roadshow in Columbus, Ohio.
To the casual coastal observer, the other three cities’ international appeal may seem a bit more obvious: Los Angeles and Chicago are business and cultural hubs in their respective regions; Las Vegas’ reputation as an entertainment center also enjoys global renown. But for the entourage, co-hosted by Columbus-based early-stage venture capital firm LOUD Capital, the mid-size Midwestern city offers an appeal perhaps best encapsulated by Ohio’s 1990s license plate: it’s in“the heart of it all.”
To describe Ohio in geographic terms is a bit of an exercise in perspective. Since it’s in the Eastern time zone, many in parts further west consider it part of the Northeast. To those in parts of the country indisputably the Northeast such as New York, New Jersey, or New England, however, Ohio is situated firmly in the Midwest. To the south, Ohio shares the banks of the Ohio River with Kentucky, a state often considered southern, while in the north it shares the shorelines of Lake Erie with Canada.
However one decides to categorize Ohio is a matter of debate. While others are left debating geographic semantics, the Buckeye State and Columbus, its state capital and home of The Ohio State University, are defining themselves as a nexus for tech founders and venture capital.
As a tech hub, Columbus checks off several boxes. For starters, the city is easily accessible. Nearly half of the US population lives within 600 miles of the city. New York is less than a nine-hour drive away; from Chicago, less than six. There are green shoots. The Kauffman Foundation, a non-profit organization dedicated to fostering entrepreneurship, has ranked the city as the top city in the US for new companies that develop into sizable employers. Forbes ranked the city #19 on its 2018 “Best Places for Business and Careers” ranking.
Despite its central location, access to the country’s third-largest university, and national entrepreneurship bona fides, however, Columbus nonetheless has missed some investors’ radar. Perhaps it’s a case of coastal myopia or a lack of familiarity with what the Columbus area has to offer; if not a little of both. Yet bit by bit, key players are proving they can run with the best of the New York and Silicon Valley pack.
Whether a VC, entrepreneur, or industry observer, one will likely agree that it helps to be in the center of the action… Being in the “heart of it all” can only be a good thing.
Driving that pace, says Navin Goyal, co-founder and managing partner of LOUD Capital, is the bounty of earnest entrepreneurs with ideas to improve and promote local business.
“Our portfolio and Columbus are led by salt-of-the-earth people with really strong ethics,” Goyal said in an interview earlier this month with Phil Morgan, host of the Positive Phil Show, a podcast with some 1.2 million subscribers. Founded in 2015, LOUD’s bread and butter is early-stage firms, with a particular focus on benefiting startups led by entrepreneurs from underrepresented groups. Nearly half of the company’s portfolio companies are led by minorities, including women. A standout success story is SHARE, a service that allows customers and businesses to book on-demand microtransit greater Columbus and Cleveland, with the Detroit area to be added soon. Beyond the more than 100 new jobs SHARE has created since Hoa McManus founded the company in 2016, SHARE provides wheels for thousands more people in the Midwest to get to work — even in public transit deserts.
Speaking of hitting the road, Drive Capital has been speeding along since its 2013 launch. Founded by alumni of Silicon Valley standby Sequoia Capital, the firm has grown into a $550 million early-stage VC juggernaut with some household names studding its portfolio. Among them are Udacity, the freemium online educational platform and Duolingo, the globally popular mobile app for language-learning, which surpassed the 300 million-user mark this past August and includes 81 different language programs for speakers of 37 languages.
Rounding out the Columbus VC trifecta is Rev1 Ventures. The company founded the eventual VC firm in 1987 as an incubator for local tech programs. Now operating out of a refurbished former Serta Mattress factory, Rev1 has raised $95.7 million across 12 funds. Its portfolio companies cover an array of sectors including agribusiness, alternative energy, and healthcare; its partners include The Ohio State University and Ohio Health, on board to help bolster further new businesses. According to industry publication Pitchbook, Rev1 is among the most active VCs in the Great Lakes region, meaning there’s plenty of new businesses and ideas to go around.
Some of those new businesses are in a completely novel sector themselves. Beyond general tech, Columbus is also staking its claim in the blockchain and cryptocurrency sectors. A LOUD-funded blockchain firm in Columbus making a name for itself is TravelCash, a mobile payment solution looking to streamline foreign-exchange and credit card transactions for overseas travelers, as well as develop white-labeled mobile payment products and loyalty cards for retailers.
The state is welcoming the blockchain/cryptocurrency sector with open arms. This past November Ohio became the first state in the union to accept cryptocurrency for corporate tax payments, payable via the new OhioCrypto.com portal. For the state even to bother with developing a crypto tax payments platform, speaks to the government’s commitment to make Ohio the center of the decentralized Web.
Whether a VC, entrepreneur, or industry observer, one will likely agree that it helps to be in the center of the action. In terms of tech, blockchain, and cryptocurrency development, Columbus — and Ohio as a whole — are well placed on many fronts to make innovation happen. Being in the “heart of it all” can only be a good thing.
Especially when that heart defies definition.