Artificial intelligence investment is topping other sectors when it involves high-risk investing, and one of Silicon Valley’s oldest firms is leading the movement.
Now Menlo Enterprises is looking for more — and is partnering with one of the world’s largest generative AI startups.
“People need to be a part of Anthropic now. It’s a hot game,” said the Menlo partner Tim Tully The company’s unique recent partnership with Anthropic, a $100 million AI-focused fund called Anthology that may invest in early-stage AI startups.
“They want to be part of the Anthropic ecosystem and have access to the models, the engineers, the leadership team,” he added. “We’re seeing a lot of really great AI companies now.”
The fund combines the Menlo Ventures team’s experience in building and growing startups with access to the Anthropic team.
Investment in the AI sector is competitive and has seen a significant increase in the last quarter, with funding doubling year-on-year globally, in response to Crunchbase data evaluation.
Menlo first invested in Anthropic with a $450 million Series C round in 2023 in funding led by Spark Capital. Menlo Ventures led $750 Series D in 2024.
Menlo Ventures’ other notable AI investments include an early investment in Conevector database; Unstructureda company that processes data to load it into a vector database; Clean lab, a company that cleans data and prepares it for models; Fontwhich offers marketing and content generation using artificial intelligence.
Collaboration with Anthropic
For Menlo, partnering with one of the biggest names in AI in its portfolio was an obvious move given the direction the sector is headed.
“There’s definitely some momentum building on the anthropic side,” Tully said.
Anthropic launched Claude 3.5 sonnet, its mid-tier model, in June, which represents a big step forward in accuracy and speed, 2x faster than its top-of-the-line model, Opus. In its announcement, Anthropic noted that the mid-tier model is “ideal for complex tasks like contextual customer service and orchestrating multi-step workflows.”
The fund is structured so that Menlo is the sole investor, while Anthropic does not participate in the actual economics of the fund. Startups in the fund receive $25,000 in free credits through Anthropic’s models. Tully estimates that might give a startup about 4 to 6 months to build, depending on what it’s doing. Anthology has not yet announced its first investment.
More vital than the money itself is access to anthropic leadership from the Chief Product Officer Mike Krieger and the President Daniela Amodei collaborating in quarterly demonstration days.
The fund allows the Anthropic team to get to know firms that are innovating their models more closely.
“It’s an opportunity for us to leverage what we’re seeing and help the Anthropic team gain some visibility and also help them better understand the ecosystem and see how people are using it,” Tully said.