Reach Capital, a San Francisco-based venture firm co-founded by Jennifer Carolan and Shauntel Garvey, focused exclusively on edtech for years before the sector ballooned with unicorns. The rare, female-led partnership closed its third fund in February, a $165 million vehicle and its largest to date. That said, returns from its previous funds show that the early bet on a now-revitalized sector is paying off.

Reach Capital’s second fund, an $82 million vehicle closed in 2017, posted a net internal return rate of 72.1% as of Q2 2021, according to data intended for LPs and obtained by TechCrunch. The fund, which put investments into Paper, Winnie and now-unicorns Handshake and Outschool, ranks multiple percentage points above the top quartile of funds of that vintage. According to Cambridge Associates data, the top quartile of funds of that vintage had a net IRR of 47.64% the same quarter.

By comparison, Reach Capital’s first fund was multiple percentage points below the top quartile of fund performers of its vintage year, 2015.

It’s worth noting that Reach Capital’s returns for its second fund are mostly paper gains, meaning that the net IRR is based on an uptick in valuations. Given the fact that the firm is heavily concentrated in follow-on rounds, the IRR is thus a snapshot of a single moment of its performance in time. Reach recently had its first cash exit, seeing portfolio company Ellevation merge with Curriculum Associates, but that is not represented in the data.

A number of blooming startups may explain what’s driving the improved performance between Reach I and Reach II. Per an impact report, Reach II invested $32 million into 14 core investments, including Newsela, Handshake and Outschool, all companies that have now gone to pass the billion-dollar valuation mark, making them unicorns. It also put money into Paper, which recently landed a nine-figure round led by IVP. By getting into those companies early, and then watching them get marked up as edtech booms as a category, Reach’s positions get validated.

The diversity of Reach II’s portfolio beats industry averages, but the founders are still concentrated as white and male. About 74% of investments are founded by men, while 26% are founded by women, the report states. About 62% of founders identify as white, 20% identify as Asian, 14% identify as LatinX and 4% identify as Middle Eastern. There are no Black founders in Reach Capital II’s portfolio.

Reach’s impressive returns come at a time when venture more broadly is booming. A number of investors and founders spoke on background to offer context about whether the returns are impressive for a seed-stage fund of that vintage. One investment strategist said that, while it’s not unheard of in this environment, the return percentage is “crazy good.”

“Easily upper quartile and probably upper decile,” they said. “Unless we are talking crypto, in which case it’s pretty ordinary.” A separate seed-stage investor pointed to Fred Wilson’s recent blogpost “Cash on Cash vs IRR,” alluding to the idea that holding periods can skew fund performance data.

Still, Reach’s returns offer an impressive window into how one of the most diverse partnerships in venture capital is performing within one of the most revitalized sectors in startupland. The momentum isn’t going unnoticed. Filings show that Reach is raising money for a $50 million opportunity fund. The company has been on a hiring spree as of late, too, bringing on Jomayra Herrera from Cowboy Ventures as a partner and Tony Wan from EdSurge as head of investor content.