Reach Capital, an 11-year-old San Francisco venture firm, has closed a $265 million fund, its fifth, to invest in founders building AI applications across learning, health, and work. Tony Wan, the firm’s head of platform, said the thesis centers on backing technology that expands human potential, adding that the firm believes AI should serve human flourishing rather than replace it. The new vehicle will write checks ranging from $1 million to $10 million, spanning pre-seed through Series A rounds, with plans to back roughly 50 companies over the next three years. No investments have been made from the fund yet.
The firm’s prior portfolio includes Replit, ClassDojo, and Coral Care. Limited partners in the new fund include Capricorn Investment Group, the Los Angeles Fire and Police Pensions, the LEGO Foundation, and College Board. General partner Jomayra Herrera said the fundraising process was smooth, taking less than six months, and that most existing limited partners increased their commitments. She attributed the speed to LP interest in sector-focused boutique funds that prioritize conviction-based investments, while noting the firm added a few new marquee backers.
This close comes amid a fundraising market that has become increasingly barbell-shaped in recent years, according to the source article. Capital has flowed heavily to large, brand-name funds on one end and to highly specialized managers on the other, leaving generalist firms struggling to attract LP attention. PitchBook and the National Venture Capital Association analysis cited in the article found that established firms captured more than 90% of the roughly $62 billion raised across U.S. venture funds through May of this year, squeezing first-time and mid-sized managers. Reach’s decade-plus focus on education technology and impact investing positions it as the kind of specialist fund that limited partners have remained willing to fund.
Reach’s previous fund sizes were $215 million for Fund IV in 2023 and $165 million for Fund III in 2021. One of its most recent exits occurred in June, when Superhuman, the productivity platform now owned by Grammarly, acquired GPTZero, an AI-detection startup co-founded by Princeton graduate Edward Tian. Financial terms were not disclosed, but GPTZero had grown to more than 19 million registered users and $30 million in annual recurring revenue on just $13.5 million raised. Reach was one of several investors in the company, alongside Uncork Capital, Footwork, and Jack Altman’s Alt Capital.
The new fund’s focus on learning, health, and work reflects a broader bet that AI applications in these areas will see sustained demand from U.S. consumers and businesses. The firm’s stated approach is to back early-stage companies that use AI to augment human capabilities rather than automate them away. With no portfolio companies yet selected from Fund V, the firm is now positioned to make its first investments from the new capital in the coming months.
