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Fund me, Elmo: Sesame Street’s venture arm invests in education tech

The goal is to help boost tech companies that share the company's vision.

Members of the Reach Capital team along with sketches of Elmo, Big Bird and Abby Cadabby
Members of the Reach Capital team along with sketches of Elmo, Big Bird and Abby Cadabby
Sesame Workshop

Sesame Workshop, which announced earlier this year that it will start investing in socially oriented venture funds, is putting an undisclosed amount of money into Reach Capital.

The nonprofit behind Sesame Street says it is partnering with Palo Alto-based Reach Capital because it supports that venture firm's goal to improve the technology used in schools.

"Education is a big part of what we do, not only through our television show but through our products and the outreach we do here and throughout the world," said Tanya Haider, executive VP of strategy and research for Sesame Workshop and head of the investment effort.

The first Sesame Ventures investment was a $5 million stake in Collaborative Fund, which focuses on a range of social issue-oriented startups, including companies in family development, health and nutrition as well as the educational space targeted by Reach.

Sesame isn't saying how much it is investing in Reach's fund. "It's not a huge sum of money," Haider said.

Sesame Ventures, despite the name, isn't a venture fund itself, but rather a means for Sesame Workshop to invest in existing venture funds as a limited partner. The goal is to help boost tech companies that share Sesame's vision, as well as to learn from startups and, of course, to make some money along the way.

The team behind Sesame Street understands that TV doesn't hold the central role it did 50 years ago when the show debuted. It already makes a host of apps and other products designed to augment the show, and last year it signed a deal with HBO to ensure its financial future.

"We are looking for monetary returns [to] help us grow our capital base," Haider said.

"For us to have a bigger impact in this space, we have to ... support work of other entrepreneurs."

That said, Bert and Ernie are patient investors, understanding that both the funds invested in so far could take seven to 10 years to see a return.

"This is a long-term bet for us," Haider said. "This is something that is not going to pay off for us next year or the year after."

This article originally appeared on Recode.net.