Menlo Ventures Raises $3B Across Two Funds for AI Strategy
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.
Fund Structure and AI Focus
The new capital gives the Silicon Valley firm more flexibility to back companies from their earliest days through later funding rounds that can require hundreds of millions of dollars. It also shows how important AI has become to a firm previously known for investments in companies including Uber, Roku and Siri. Matt Murphy, a partner at Menlo since 2015, has played a central role in developing that strategy. He invests across AI infrastructure, developer tools and AI-native software and has led Menlo’s investments in companies including Anthropic, Lovable, OpenRouter, Harness, Semgrep and Legora.
Anthropic Investment History
In recent years, 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. Murphy spent 15 years as a general partner at Kleiner Perkins before joining Menlo, 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.
Investment Approach and Concentration
AI companies need more capital than previous generations of software companies. They’re staying private for longer, and the winners are quicker to break from the pack. Through the venture fund, Menlo invests in seed and Series A companies, but the inflection fund gives the firm the scale and flexibility to back the clear winners as they emerge. This was the strategy with Anthropic, Suno, Wispr, OpenRouter and Lovable, according to Crunchbase News.
Murphy first invested in Anthropic in the Series C round. When Menlo led the Series D round, it was still the largest investment the firm had ever made. The firm has recently invested $100 million in companies including Lovable and Suno. Menlo is pursuing a barbell approach, with more aggressive stage- and capital-wise deployment on the later end for the right companies, while maintaining a high bar overall.
