Jennifer Carolan, Shauntel Garvey, Wayee Chu and Esteban Sosnik (left to right) co-founded Rich Capital to back mission-driven edtech startups founded by entrepreneurs who are close to the problems they seek 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 Rich Capital announced Monday that it has raised $215 million to invest in tech startups focused on addressing education gaps. With the new fund, its largest yet, it plans to support companies based in the United States and abroad, particularly in Latin America.
Shantel Garvey, co-founder of Rich Capital, said her firm has successfully seen startups rise to the top of the technological barriers that permeate American classrooms over the years. From the introduction of the iPad as a learning tool for K-12 students to the rise of AI-based teaching assistants, Reach Capital has funded companies that have helped teachers and students use these devices and technologies in efficient ways, he 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 Ripple, which recently partnered with Google to create a product similar to Microsoft’s AI-based coding. partnered. Assistant GitHub Copilot. Another highlight investment of Rich Capital is communication app ClassDojo, 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 billion dollar valuations themselves.
Spinned out of nonprofit New Schools Venture Fund by co-founders Jennifer Carolan, Wei Chu, Esteban Sosnick and Garvey in 2015, Rich Capital focuses on seed, Series A and Series B rounds. With $570 million in total funding to date, 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 startup Bijus) and Learn Capital, which has more than $1 billion in assets and Supported by online education institutions Udemy and Coursera.
With a team of 15 diverse partners and employees, Rich Capital ranks as one of the most diverse investment firms in the country. Garvey says the composition of his team has helped diversify the founders Rich Capital has invested in.
Of the more than 100 founders who have received money from Rich Capital, about 36% are women, about 16% are Latinx, and 4% are black. By comparison, the industry average is dismal: Last year, women-led startups received only 2% of the total capital invested in VC-backed startups, and black founders received about 1%. “The people writing the checks are often going to have a bias and invest in people who look like them,” he says. “What helps change that actually makes Czech writers diverse.”
While Rich has no revenue benchmarks for potential companies, Garvey said the firm is looking for early signs that a product will be accepted by consumers. Sometimes that can mean the traction a startup’s product gets on Twitter, he says. “We want the tools people are using for teaching and learning to mimic the tools we use in our daily lives,” says the MIT and Stanford graduate.
The firm also announced its first founder fund through which 40 participating founders can invest in and mentor other startup founders. Garvey said the new funding will help build an ecosystem and network for founders and investors. “The goal is to introduce venture capital to a wider range of people who have never had access to this asset class before and to strengthen the ecosystem of edtech entrepreneurs,” he said.