Reach Capital raises $265 million fund to invest in AI startups across learning, health, and work

Reach Capital has raised $265 million for its fifth fund, giving the early-stage venture firm fresh capital to make a bigger bet on AI startups tackling three deeply human markets: how people learn, stay healthy, and work.

The new fund, Reach V, arrives as AI investment continues to pour into foundation models, coding tools, infrastructure, and enterprise software. Reach Capital is taking a different route. Rather than competing for the next giant model developer, the firm is looking further up the stack at founders applying AI to problems people encounter at school, at work, and in healthcare.

“The systems that shape how people learn, stay healthy, and build meaningful lives are being reimagined in real time,” said Jennifer Carolan, co-founder and general partner of Reach Capital. “AI gives this generation of founders an extraordinary opportunity to make those systems more accessible and effective. Reach V allows us to keep doing what we do best: partnering early with mission-driven founders who understand these problems deeply and are building toward measurable, lasting change.”

Reach said the $265 million fund was oversubscribed and closed quickly. Its investors span university endowments, pension funds, education and community organizations, family offices, and founders previously backed by the firm. Limited partners include Capricorn Investment Group, College Board, Los Angeles Fire and Police Pensions, the LEGO Foundation, and the San Francisco State University Foundation.

Reach Capital is betting on the application layer of AI

Founded in 2015, Reach Capital now manages $1 billion across five funds and has invested in more than 180 companies. Its portfolio offers a window into the types of businesses Reach V could pursue.

In learning, its investments include ClassDojo, Desmos, and Lovevery. Its healthcare portfolio includes Cartwheel, Coral Care, and Stepful. On the workforce side, Reach has backed Handshake, Replit, and WorkWhile.

Replit is perhaps the clearest example of how that strategy intersects with the current AI boom. The developer platform has become a prominent player in AI-assisted software creation, where natural-language prompts are increasingly capable of turning ideas into working applications.

The broader opportunity Reach is chasing goes beyond adding chatbots to existing products. AI is beginning to change the economics of services that have historically depended heavily on human labor. Tutoring, career coaching, software development, administrative healthcare work, and professional training can now be delivered or supported by software in ways that were far harder just a few years ago.

That shift could create a large opening for startups, particularly in markets where access has historically been constrained by cost, geography, or shortages of skilled workers.

Reach’s investment strategy has long centered on companies tied to human development rather than technology for its own sake. The firm says its funds consistently rank in the top quartile of industry benchmarks, pairing its social-impact thesis with financial returns.

The timing of Reach V makes the thesis more interesting. Much of the first wave of generative AI investment centered on building the underlying technology. The next wave is increasingly about what founders can build with it.

For Reach Capital, that means betting that some of AI’s biggest companies may emerge from places that look less like traditional AI labs and more like classrooms, clinics, workplaces, and tools people use to build their careers.

The $265 million fund gives Reach plenty of capital to find out.