Reach Capital said Tuesday it has closed an oversubscribed $265 million fifth fund, its largest since the firm was founded 11 years ago, to back early-stage startups applying artificial intelligence to learning, health and work.
Fund V surpasses the San Francisco firm's $215 million Fund IV, raised in 2023, and its $165 million Fund III from 2021. The new capital will be deployed in checks of $1 million to $10 million spanning pre-seed through Series A, with a target of roughly 50 companies over the next three years.
Sector Focus Over Breadth
General Partner Jomayra Herrera said the firm closed the fund in less than six months, crediting demand from limited partners for what she described as sector-focused, conviction-based investing rather than broad, generalist funds. Backers of Fund V include Capricorn Investment Group, the Los Angeles Fire and Police Pensions, the LEGO Foundation and the College Board, alongside existing limited partners the firm said doubled down on the new vehicle.
AI should serve human flourishing, not replace it.
Tony Wan, head of platform, Reach Capital
The firm points to its existing portfolio as evidence of the strategy's payoff. Past investments include coding platform Replit and classroom-communication app ClassDojo, along with elder-care startup Coral Care. Reach also backed AI-detection company GPTZero, which was acquired by Superhuman in June after growing to more than 19 million users and $30 million in annual recurring revenue.
Reach's raise lands amid a broader surge in venture capital flowing to artificial-intelligence startups this year, with mega-rounds for foundation-model labs increasingly overshadowing early-stage checks. Herrera's team is betting that limited partners still want exposure to smaller, sector-specific funds even as headline-grabbing AI rounds climb into the tens of billions of dollars.
The firm has not yet disclosed its first investments out of the new fund. Its focus on pre-seed and Series A companies means portfolio construction typically unfolds gradually, with initial checks expected in the coming months as the team evaluates founders building AI tools for classrooms, clinics and workplaces.