Jennifer Carolan, Shantel Garvey, Wei Chu and Esteban Sosnick (left to right) are Reach Capital to Back mission-driven edtech startups founded by entrepreneurs who are close to the problems they’re trying to solve.
Reach the capital
Rich Capital has backed more than 120 companies since 2006, including billion-dollar startups like Handshake and ClassDojo.
Edtech venture capital firm Reach Capital announced Monday that it has raised $215 million to invest in tech startups focused on addressing the gap in education. With the new fund, its largest ever, it plans to support companies in the US and abroad, particularly in Latin America.
Shauntel Garvey, cofounder of Reach Capital, says that over the years, her firm has seen startups successfully rise to the top of the technological barriers that permeate American classrooms. From the introduction of iPads as learning tools for K-12 students to the rise of AI-based teaching assistants, Reach Capital has funded companies that help teachers and students use these tools and technologies in effective ways, she says.
Its portfolio includes Handshake, which helps college students find jobs and is now valued at $3.5 billion, the $1.7 billion on-demand tutoring platform Paper and collaborative coding tool Replit, which recently partnered with Google to build a product similar to Microsoft’s AI-based coding. is Assistant GitHub Copilot. Another highlight investment for Reach Capital is the communication app ClassDojo, which is used by 50 million students, teachers and parents.
The San Francisco-based venture firm has funded a total of 120 edtech startups. Some of them have been acquired by big companies like Renaissance, Turnitin and Chegg or have themselves been valued at billions of dollars.
Spinned out of nonprofit New School Venture Fund by co-founders Jennifer Carolan, Wei Chu, Esteban Sosnick and Garvey in 2015, Reach Capital has focused on seed, Series A and Series B rounds. With $570 million in total funding raised so far, Rich Capital is small compared to other edtech venture firms like Owl Ventures, which has around $2 billion in assets (its portfolio includes Masterclass and Indian edtech unicorn startups) and Learn Capital, which has more. Over $1 billion in assets and has backed online learning companies Udemy and Coursera.
With a team of 15 diverse partners and employees, Reach Capital ranks as one of the most diverse investment firms in the country. Garvey says the composition of her team has helped diversify the founders that Reach Capital has invested in.
Of the more than 100 founders who have received money from Reach Capital, about 36% are women, 16% are Latinx, and 4% are black. By comparison, the industry average is dismal: Last year, women-led startups received just 2% of the total capital invested in VC-backed startups, and black founders received about 1%. “People who write checks are often biased and invest in people who look like them,” she says. “What will help change that is actually diversifying Czech writers.”
While Rich doesn’t have revenue benchmarks for potential companies, Garvey says the firm looks for early signs that the product will be adopted by customers. Sometimes that can mean the traction a startup’s product gets on Twitter, she says. “We want the tools people are using to teach and learn to mimic the tools we use in our daily lives,” says the MIT and Stanford graduate.
The firm also announced its first Founders Fund through which 40 participating founders can invest and mentor other startup founders. Garvey says the new funding will help build an ecosystem and network for founders and investors. “The goal is to strengthen the ecosystem of edtech entrepreneurs and introduce venture capital to a broader set of people who have never had access to this asset class before,” she says.