Menlo Ventures Raises $3 Billion Across Two AI Funds
In June, Menlo Ventures announced $3 billion in new capital across two funds, marking the largest raise in its 50-year history. Menlo Ventures XVII will invest primarily in seed and Series A companies, while Menlo Inflection IV will provide growth capital to startups at Series B and beyond. The new funds will target companies throughout the AI market, from foundational models and infrastructure to enterprise, healthcare and consumer applications. According to Crunchbase News, the capital gives the firm more flexibility to back companies from their earliest days through later funding rounds.
AI Portfolio and Key Holdings
Anthropic has become the most prominent company in Menlo’s AI portfolio. The firm first invested in the AI model developer in 2023 and has added to its investment in later rounds. Menlo’s other AI investments include Lovable, Suno, OpenRouter, Wispr, Fireworks AI, Modal, Skild AI and Goodfire. The firm was previously known for investments in companies including Uber, Roku and Siri.
Matt Murphy, a partner at Menlo since 2015, has led the firm’s investments in Anthropic, Lovable, OpenRouter, Harness, Semgrep and Legora. Murphy invests across AI infrastructure, developer tools and AI-native software.
Strategy on Larger Checks and Concentration
Murphy said AI companies need more capital than previous generations of software companies and are staying private for longer. The inflection fund gives Menlo the scale to back clear winners as they emerge, following the approach used with Anthropic, Suno, Wispr, OpenRouter and Lovable. The firm has written $100 million checks in companies including Lovable and Suno.
Murphy noted that the Anthropic investment began in the Series C round and that the Series D round was the largest investment the firm had ever made at the time. The firm is pursuing a barbell approach, becoming more aggressive on later-stage AI opportunities while maintaining high standards amid overfunded categories.
Market Phases and Next Opportunities
Murphy said Menlo is moving from Phase 1 to Phase 2 of the AI market and is seeing a different set of opportunities and challenges. According to Crunchbase News, the relationship with Anthropic gave the firm an early view into market direction.
Murphy previously spent 15 years as a general partner at Kleiner Perkins, where he was an observer at Google from the firm’s initial investment through its IPO and helped launch the $200 million iFund with Apple.
