Artificial intelligence is supercharging founders’ work in reshaping how people learn, live and earn. Reach Capital is looking for the founders leveraging AI to do those things inclusively.
The San Francisco-based investment firm raised $265 million for its fifth fund, which will back AI-enabled companies working in education, skill development, health and the future of work.
“We’re interested in finding and backing those founders that are improving opportunity and access for everyone,” Reach Capital’s Jennifer Carolan told ImpactAlpha.
The fifth fund’s roster of investors includes Capricorn Investment Group,College Board, the LEGO Foundation, San Francisco State University Foundation and the Los Angeles Fire and Police Pensions.
Early AI bets
The venture capital firm is a 2015 spin out of NewSchools Venture Fund, a nonprofit venture philanthropy organization focused on education technologies. Reach has since directed more than $1 billion through 180 investments and five funds.
Reach has been making bets on AI applications since its first, $53 million fund. One of its early portfolio companies was Mathpix, which uses AI to convert handwritten equations into a searchable digital document.
Another was Replit, a coding company that allows users to build applications using natural language. Reach was a pre-seed and seed investor in Replit; the company this yearraised $400 million in a Series D equity round at a $9 billion valuation. Reach got a partial exit.
“We were able to return a lot of capital to our LPs,” Carolan said.
One of those LPs is Sesame Street, which has invested in multiple Reach funds.
The nearly 60-year-old company “was one of our early backers,” said Carolan. “To be able to return a large chunk of capital to a group like Sesame Street is very motivating and exciting for us.”
Track record
Reach closed its fifth fund amid a stubbornly difficult period for impact fundraising. Most of the LPs have been with Reach since its first fund, said Carolan.
The team’s fundraising success is in large part due to their track record, noted Mark Berryman of Capricorn, one of the latest fund’s largest investors. Compared to other impact fund managers in education, Reach has outperformed across its funds in returns and getting capital back to investors, he said. “We felt they also had a stronger impact framework behind them.”
For investors like Capricorn, Reach’s focus on early stage investing across learning, health and work has taken on new relevance as AI reshapes those sectors. By the time a startup reaches Series B or C, Berryman argues, it’s competing against the same AI giants building the underlying models. “In our view, you really need to do this at the seed level, and that’s where they focus.”
“This is a venture capital fund in 2026 with a very clear impact thesis in education that did a one and done oversubscribed close. That is a bright spot for our industry,” he added. “I would say that even if I was not an LP.”
