Menlo Ventures on Tuesday announced a $3 billion funding, the largest in the company's 50-year history, largely driven by its AI portfolio, particularly Anthropic. The company's stake in the model maker is now worth about $14 billion, people told Bloomberg.
To hear from the folks at Menlo, they were horrified when they staked a $750 million investment in Anthropic in 2024 to pre-empt the model maker's Series D. At the time, the round quadrupled the startup's valuation to $18.4 billion.
The bet itself was probably not that risky, but the means by which the company raised that kind of money was even riskier.
Menlo was an early investor in Anthropic's Series C before it developed the product. By 2024, long before Claude Cord and Claude Mythos, the company was showing signs of success. The company had secured a $4 billion deal from Amazon and was being hotly pursued by a venture capital firm founded by former OpenAI researchers, including the brothers CEO Dario Amodei and president Daniela Amodei. It was an up-and-coming AI company, as many startups founded by OpenAI alumni continue to be today.
But Menlo's fundraising methods were eye-opening. In 2024, the venture world is just emerging from the post-pandemic venture capital winter, with major players like SoftBank and Tiger Global still licking their wounds. No one was writing a check for $530 million.
Menlo structured the majority of the approximately $500 million transaction as a special purpose vehicle (SPV), a one-time investment vehicle established to pool funds from multiple sources for a single transaction. Menlo also contributed $250 million from his own foundation and donations from Menlo insiders, bringing the round's total to $750 million, sources told Forbes at the time.
Since then, AI SPVs have become as common as cockroaches, making Anthropic a particular target. Last month, AI companies issued a warning, calling all unauthorized SPVs and secondary markets claiming to sell their company's shares “scams.”
But for investors who participated in Menlo's 2024 approval deal, this aggressive push paid off handsomely. Mr. Menlo continued to invest in the company's Series E and F.
On top of that, Menlo launched a $100 million startup fund with Anthropic in 2024, giving it a cute name: Anthology. The fund has since grown to nearly $250 million in deployed capital to date, sources familiar with the fund told TechCrunch. Not only have we helped over 60 companies (and provided them with support such as access to human leaders and credits to Claude), but we've already generated a lot of profit as well. These include Graphite, which was acquired by Cursor, and Astrix Security, which was acquired by Cisco.
This fund gave Menlo an early insight into AI startups, categories, and technology trends. Since then, the company has built a broad bench of AI investments, adding AI stars such as OpenRouter, Higgsfield, Legora, Lovable, and OpenEvidence to its portfolio.
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