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London Tech Week

US VC firm Menlo Ventures closes $1.35B fund to invest in AI startups

Menlo Ventures team
Picture credits: Menlo Ventures

Bay Area-based VC firm Menlo Ventures has closed a whopping $1.35 billion in new capital. It will be split between early-stage fund Menlo XVI and early growth fund Menlo Inflection III and their affiliated funds. 

With the new funds, Menlo Ventures claims that it has raised over $3.8 billion across eight fund groups and distributed $5.2 billion to its LPs. Notably, the Menlo XVI is focused on the seed to Series A stages while the Menlo Inflection III is focused on Series B and beyond stages. 

Focuses on AI transformation

The investment comes with a mandate to invest in promising AI companies. It focuses on five key commitments, including a responsible approach to AI, including internal governance, proper transparency and documentation, risk and benefit forecasting, auditing and testing, and feedback cycles and ongoing improvements.

Notable portfolio investments

Founded in 1976 by Henry DuBose Montgomery, Menlo has witnessed nearly 80 portfolio companies exit, and 15 of them went public, including Getaround, Carbonite, Gilead, Roku, and Rover. Besides this, the firm has been a seed and early-stage investor in several promising startups, including Slash, Fox Robotics, and Harness

Most recently, the firm brought on partners Joff Redfern, the former CPO of Atlassian; well-known consumer investor Amy Wu, who joins Shawn Carolan in leading Menlo’s consumer investments; and Tim Tully, the previous CTO of Splunk.

“With this $1.35 billion in new capital, we’re making a commitment to support the forthcoming generation of AI startups,” said Venky Ganesan. “Focusing on AI, we will continue on our mission to identify outlier companies before they are obvious, to back and build category leaders, and to support them as they grow. With their immense potential, early-stage AI startups embody the prospect of revolutionary innovation. The best among them will forever change the technology landscape and the human experience.”

“Generative AI represents a seismic shift that will add trillions of dollars in value to the global economy. Menlo Ventures will help write the next chapter,” said Matt Murphy, partner at Menlo Ventures. “​​We’ve built a team and created an ecosystem around the firm designed to attract the best and brightest in the AI domain to partner with Menlo. When we talk to entrepreneurs, the fact that we’ve backed people like Edo Liberty at Pinecone, Dario Amodei at Anthropic, and Jyoti Bansal at Harness is a huge draw. And we’ve strategically built our team, hiring deeply technical partners with operating experience who provide valuable guidance to our portfolio.” 

“It’s an exciting time to be in VC, particularly as an investor in consumer technology,” said Menlo Ventures partner Shawn Carolan, who leads the firm’s expanded consumer practice. “The entire tech sector is buzzing with excitement for what’s to come. AI will introduce entirely new categories of products and supercharge existing ones. AI will help us feel more creative, more connected, more productive, and more powerful. The potential is profound.”

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