Today we are announcing our fourth core fund — Reach IV — a $215 million fund to invest in technologies that expand access to opportunity through education and economic mobility.
We’re grateful to continue this journey together with the four original founders, and have grown into the team we had hoped to build when we first launched in 2011. Over the last decade, we have invested in more than 130 education startups, sat on more than 75 boards, supported 23 companies through acquisitions and hosted 13 annual Founders’ Day convenings.
Reach-backed tools land in people’s homes, teachers’ desks, and babies’ hands. They impact health, careers, and livelihoods. The stakes are high and we take this responsibility to heart. We are former teachers, founders and researchers, and we surround ourselves with educators and specialists. Some of our liveliest discussions about an investment opportunity are about its quality and potential for impact. We regularly measure and share what we learn.
Since our first fund, we’ve witnessed a major transformation of the educational system from paper to digital. Nearly every U.S. child today has access to a learning device and soon this will be true across the world.
In our mission to improve lives through education, we’ve just scratched the surface. Today our public education system, designed to democratize opportunity, is under strain like never before. Plagued by partisanship, teacher shortages and low public confidence, our institutions of learning are at a crossroads.
State policy too is steering public dollars towards private education. When we made our first investment back in 2011, only one state (Arizona) had passed ESA legislation to give families access to public per-pupil funds for private or homeschool education. Today 15 states have passed ESAs, with Florida recently passing the most comprehensive law yet.
But it’s not just our K-12 system under pressure. Child care and college have become prohibitively expensive with costs rising higher and faster than all household expenses other than medical services. The average cost of attendance for a student living on campus at a public in-state university is now $102K over four years.
Post-college, the future of work is being reconfigured by AI and automation. Eighty percent of CEOs now believe the need for new skills is their biggest business challenge. Learning on the job is imperative and companies from Fortune 500 to startups now offer employees the opportunity to further their learning through degrees, upskilling and coaching.
We invest with a thesis-driven approach informed by society’s major challenges. But we look to founders to show us what is possible. To this end, we also launched the first Reach Founders’ Fund, a sidecar fund that will mirror Fund IV investments. Forty eight current or former Reach Founders have joined. Many are edtech pioneers innovating in a nascent sector and we would not be here today without them.
The addition of the Founders’ Fund will accelerate learning between our past and present Founders — through board seats, talent networks and sourcing — and further strengthen the Reach community and the broader edtech sector.
As our ambitions have grown, so has our footprint. We’ve been expanding our geographic scope beyond the U.S. and are excited to further build on our footholds in Latin America and Europe. Just last week, we hosted three edtech meetups in Brazil.
One could mistake our impact orientation for a softness around financial outcomes; our funds’ performance proves otherwise. All of our Funds have top quartile DPIs and we’ve backed a quarter of the highest valued edtech companies in the world. We’ve seeded category-defining brands across early childhood, K-12, higher ed and future of work.
We don’t get dogmatic about stage or model. Our last three funds have been roughly half consumer and half SaaS (schools and corporate). In Reach II and III, about half the capital was deployed at Seed with the remaining at Series A and a few later stages. What is consistent across all our investments: a firm footing in pedagogical best practices (whether that be for a second-grade class or a phlebotomy curriculum) and a maniacal focus on customers.
We’re grateful to support companies that are improving so many people’s lives. For example, Workwhile is bringing respect, dignity and flexibility to hourly wage earners. Replit is enabling software developers to build and collaborate with the power of AI. Desmos is helping every student not only learn math, but love learning it. Springboard is upskilling workers at Walmart and Amazon for higher paying jobs. TeachFX, a startup we incubated, is providing teachers analyses of classroom dialogue to help them engage with all students.
When we first got started, we were backed by mostly Silicon Valley tech entrepreneurs and VCs who were willing to take a risk on this unlikely band of investors. These early believers are still with us but Reach IV has grown to a majority-institutional fund. It inspires us to know we are partnering with firefighter pension funds, teachers unions, hospitals and university endowments.
Our institutional backing hasn’t changed our approach or DNA; we still incubate ideas and invest through an impact lens. We hope you’ll be in touch if you’re building to expand access to education and opportunity.