Chris is an investor in the west coast venture capital scene. He co-founding Drive Capital in Columbus, Ohio, based on the idea that the most compelling emerging market is America, just outside of Silicon Valley.
The pitch has been bought into by institutional investors. They believe that Mark Kvamme, who has been with the firm for more than two decades, knows what he is doing. In the summer of 2015, Drive's limited partners committed to invest $1 billion more with the firm.
No other coastal VCs have opened outposts in Columbus despite Drive's efforts to prime the area. Olsen told us in a new interview that the opposite is happening, that another non-regional firm is opening up shop nearby. I read about VCs coming to the Midwest in different places, but I think they are doing the opposite. They are concentrating more and more on their time in California.
VCs worried about their performance are returning to the terrain they know best. If you are a Silicon Valley-based venture firm, no one will ask you how you missed company X in Columbus. That is not happening. They will ask you how you missed the company that was in Silicon Valley. They don't want to miss out on the outdoors.
That is fine with Drive, which now has 36 employees. There are more de novo venture firms that are being launched in the region, and Drive is not the only local stop for entrepreneurs.
In the meantime, using Columbus as its home base for a much broader regional strategy has paid off. The car insurance company went public in October 2020 after raising hundreds of millions of dollars from East and West Coast investors. Drive alone invested $65 million.
Retail investors have probably lost money on the company because its shares have tanked since they went public. On the day of the IPO, Drive had a 26.1% stake in the company. Six months after the lock-up period ended, the company's shares were trading at $190, which is still way up from their opening day price.
The post-pandemic challenges have been faced by Drive. According to a string of recent reports, Olive Artificial Intelligence isn't living up to its promise.
The healthcare automation startup used its history of pivots as proof that it had finally found a business that worked. It describes itself as a robotic process automation company that takes on hospital workers' most tedious tasks so nurses and physicians can spend more time with patients. The willingness of Olive to shift gears has been appreciated by investors. It has raised $902 million over the years and said last year that it was worth $4 billion.
According to interviews with 16 former and current employees and health tech executives, Olive has generated only a fraction of the savings it promised. There are hospitals that won't touchOlive because they know people who've been burned.
As it laid off 450 employees, Olive admitted to making mistakes. Sean Lane said in a message to staffers that Olive's values of "choose vision over status quo" and "act with haste" drove them to make significant investments across the most pressing parts of healthcare.
The outfit may or may not be able to correct the ship. When asked about the reports, he downplayed them. Olive is going through an incredible growth curve and is on a rapid trajectory, and the reality is that every company that grows quickly is just messy. It is not going to be perfect for companies that grow 300% a year to be asked to do three times the amount of things they did the year before.
With fewer dollars being invested on less generous terms, you have to make choices. You have to make changes. The company is not failing.
You can listen to our conversation about where else it is investing in the U.S., the firm's newest investments, and the changing nature of board seats.
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