Menlo Ventures Celebrates Success as They Build a $3B Fund on the Strength of Anthropic Investment
On Tuesday, Menlo Ventures revealed it has successfully raised $3 billion, marking the largest fundraising effort in the firm’s five-decade history. This substantial amount has been largely attributed to its investments in artificial intelligence, particularly in the company Anthropic, which is now valued at approximately $14 billion.
According to representatives from Menlo, they were quite anxious when they made a decisive $750 million investment in Anthropic in 2024, leading the company’s Series D funding round. This investment at the time led to a remarkable fourfold increase in Anthropic’s valuation, bringing it to $18.4 billion.
While the decision to invest wasn’t inherently risky, the approach Menlo took to secure such a hefty sum was certainly noteworthy.
Menlo had been an early supporter of Anthropic, even before the startup had launched any products. By 2024, the company had begun to show significant promise, having secured a $4 billion contract with Amazon and attracting attention from venture capitalists, thanks in part to its founders, former OpenAI researchers Dario and Daniela Amodei. Anthropic was becoming a prominent player in the AI sector, a trend seen among many startups launched by former OpenAI staff.
However, securing investment during that time was a significant challenge. The venture capital landscape was just starting to recover from a downturn caused by the pandemic, with established firms like SoftBank and Tiger Global still recovering. It was uncommon for anyone to sign off on such a large investment.
Menlo’s innovative approach included structuring about $500 million of the deal through a special purpose vehicle (SPV) — a unique investment entity designed to gather funding from various sources for a specific project. In addition, Menlo contributed $250 million from its own resources, supplemented by investments from individuals associated with the firm, which brought the total funding to $750 million.
Since that time, AI-focused SPVs have surged in popularity, with Anthropic being a key focus. The company had to issue a warning last month about unauthorized SPVs and secondary markets attempting to sell its shares, labeling them as “scams.”
For those who invested through Menlo’s sanctioned 2024 deal, the aggressive strategy reaped substantial rewards. Menlo proceeded to invest in subsequent rounds of Anthropic’s Series E and F funding.
In 2024, Menlo also embarked on a $100 million startup fund in collaboration with Anthropic, whimsically named Anthology. This fund has since grown, with investments now totaling closer to $250 million, according to informed sources. It has supported over 60 companies by offering various forms of assistance, including introductions to Anthropic leadership and credits for their AI model Claude. Returns have already started to materialize, including investments in Graphite, which was acquired by Cursor, and Astrix Security, purchased by Cisco.
The fund has enabled Menlo to stay ahead of developments in AI startups, technologies, and categories right from their inception. The venture capital firm has cultivated a strong reputation for AI investments, adding renowned companies such as OpenRouter, Higgsfield, Legora, Lovable, and OpenEvidence to its portfolio.
