3 months ago
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AI investment has towered over other sectors when it comes to venture investment, and one of the oldest firms in Silicon Valley has led that charge.
Now Menlo Ventures is looking for more — and partnering with one of the biggest generative AI startups in the world.
“People want to be a part of Anthropic right now. It’s playing the hot hand,” said Menlo partner Tim Tully about the firm’s unique, new partnership with Anthropic — a $100 million AI dedicated fund named Anthology to invest in early-stage startups using AI.
“They want to be part of the Anthropic ecosystem and get access to the models, to the engineers, to the executive team,” he added. “We’re seeing a lot of really great AI companies right now.”
The fund marries the experience of the Menlo Ventures team in building and growing startups with access to the Anthropic team.
Investments in the AI sector are competitive, heating up in the past quarter with funding doubling year over year on a global basis, according to an analysis of Crunchbase data.
Menlo first invested in Anthropic in the $450 million Series C in 2023 in a funding led by Spark Capital. Menlo Ventures led the $750 Series D in 2024.
Menlo Ventures’ other notable AI investments include an early investment in Pinecone, a vector database; Unstructured, a company that processes data to load into a vector database; Cleanlab, a company that cleans data and prepares it for models; and Typeface, which offers marketing and content generation using AI.
Partnering with Anthropic
For Menlo, partnering with one of the biggest AI names in their portfolio was an obvious move considering where the sector is heading.
“You can definitely feel the momentum building on the Anthropic side,” said Tully.
Anthropic launched Claude 3.5 sonnet, its midlevel model, in June, a big step up in terms of accuracy and speed at 2x faster than its top model, Opus. In its announcement, Anthropic noted the midlevel model is “ideal for complex tasks such as context-sensitive customer support and orchestrating multi-step workflows.”
The fund is structured so Menlo is the sole investor, while Anthropic is not participating in the actual economics of the fund. Startups in the fund get $25,000 in free credits with Anthropics’ models. In Tully’s estimation this could give a startup around four to six months lead time to build, depending on what it is doing. Anthology has yet to announce its first investment.
More significant than just the money is access to Anthropic leadership with Chief Product Officer Mike Krieger and President Daniela Amodei participating in quarterly demo days.
For the Anthropic team, the fund brings it closer to companies innovating with their models.
“Here’s an opportunity for us to take what we’re seeing and and help get some visibility to the Anthropic team and help them understand the ecosystem a little bit better, and see how people are using it,” Tully said.
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Illustration: Dom Guzman
