Reach Capital raises $265M Fund V to back AI founders building to ‘expand human potential’

Reach Capital, an 11-year-old San Francisco venture firm, has closed its $265 million Fund V to back founders developing artificial intelligence applications in learning, health and work. Tony Wan, head of platform, said the firm believes AI should “serve human flourishing, not replace it.” Its previous investments include Replit, ClassDojo and Coral Care. The fund will invest $1 million to $10 million per company from pre-seed through Series A, backing roughly 50 companies over the next three years. No investments have yet been made from Fund V. Limited partners include Capricorn Investment Group, the Los Angeles Fire and Police Pensions, the LEGO Foundation and College Board. General partner Jomayra Herrera said fundraising took less than six months. Most existing LPs increased their commitments, while Reach added several new marquee investors. She attributed the result to demand for sector-focused boutique funds making conviction-based investments. That positioning comes as venture fundraising has become increasingly barbell-shaped, with capital concentrating in giant, brand-name funds and sharply focused specialists while generalist firms struggle to attract LPs. PitchBook and the National Venture Capital Association found that established firms captured more than 90% of approximately $62 billion raised across U.S. venture funds through May this year. Reach’s decade-plus focus on edtech and impact investing places it within the specialist segment that has remained attractive to LPs. The firm raised $215 million for Fund IV in 2023 and $165 million for Fund III in 2021. Its portfolio also recently produced an exit. In June, Superhuman, the productivity platform owned by Grammarly, acquired GPTZero, an AI-detection startup co-founded by Princeton graduate Edward Tian. Terms were undisclosed. GPTZero had more than 19 million registered users and $30 million in annual recurring revenue after raising $13.5 million. Reach invested alongside Uncork Capital, Footwork and Jack Altman’s Alt Capital.