Reach Capital Announces $265 Million Fund V

Reach Capital, a San Francisco-based venture capital firm, has announced the close of its $265 million Fund V. This latest fund is part of the firm’s 11-year history of investing in startups that leverage artificial intelligence (AI) to improve human lives. The firm’s head of platform, Tony Wan, emphasizes that the thesis of the new fund is to back founders building AI applications that can ‘expand human potential.’ This means focusing on founders working across three key areas: learning, health, and work.

Wan emphasizes that Reach Capital believes AI should serve human flourishing, not replace it. The firm’s previous investments include Replit, ClassDojo, and Coral Care, all of which are pioneering innovative solutions in their respective fields. The new fund will write checks ranging from $1 million to $10 million, spanning pre-seed through Series A, into roughly 50 companies over the next three years.

Reach Capital’s new fund is noteworthy given the current state of the venture capital market. Analysis by PitchBook and the National Venture Capital Association found that established firms captured more than 90% of the roughly $62 billion raised across U.S. VC funds through May of this year. This leaves a smaller pool of first-time and mid-sized managers to compete for whatever’s left. Reach’s thesis, with over a decade of experience in edtech and impact-investing, fits the mold of the kind of specialist fund LPs have remained open to funding.

Reach Capital’s general partner, Jomayra Herrera, notes that fundraising for Fund V went smoothly. She attributes this to LP interest in sector-focused boutique funds that focus on conviction-based investments. The vast majority of their limited partners (LPs) doubled down, and they brought on a few new marquee LPs. This is a testament to the firm’s ability to identify and support innovative startups that are making a real difference in the world.

One of Reach Capital’s most recent exits came in June, when Superhuman, the productivity platform now owned by Grammarly, acquired GPTZero, the AI-detection startup co-founded by Princeton graduate Edward Tian. GPTZero had grown to over 19 million registered users and $30 million in annual recurring revenue on just $13.5 million raised, and Reach was one of several investors in the company. This exit is a prime example of the kind of success that can be achieved when AI is leveraged to ‘expand human potential.’

The firm’s previous funds have seen significant success, with Fund IV raising $215 million in 2023 and Fund III raising $165 million in 2021. Reach Capital’s ability to identify and support innovative startups has made it a leader in the venture capital industry. With the close of Fund V, the firm is well-positioned to continue its mission of backing founders building AI applications that can ‘expand human potential.’