From 'heartburn' to $14 billion: Inside Menlo's early Anthropic investment that broke all the rules.
Menlo Ventures is set to see a massive return on its early investment in AI startup Anthropic, with its stake growing from an initial gamble to an estimated $14 billion value. Despite the company being pre-revenue at the time, the firm bet on Anthropic's potential to compete with OpenAI.
Why it matters
This success story underscores the high-risk, high-reward nature of venture capital in the current AI boom and the strategic importance of backing competitors to market leaders.
Anthropic co-founder and CEO Dario Amodei (left) with Menlo Ventures partner Matt Murphy last year. Menlo Ventures As Anthropic prepares to go public later this year, Menlo Ventures will be one of the biggest winners. The firm's initial investment made little sense under its normal playbook, and it declined to lead the round. Even with OpenAI already a household name, the partners thought the market had room for a rival. Anthropic was too expensive, too early, and had no revenue. Menlo Ventures invested anyway, and that gamble is now worth an estimated $14 billion. When partner Matt Murphy met cofounder and CEO Dario Amodei on a five-minute Zoom meeting in early 2023, Anthropic was pre-revenue and had not publicly launched its model. The $4.1 billion valuation it sought was far above Menlo's usual venture range, and the company was still too early for its growth fund.
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