‘A Rare Land-Grab Moment’: Menlo Ventures’ Matt Murphy On The Next Wave of AI And Putting $3B In New Capital To Work

Menlo Ventures announced three billion dollars in new capital across two new funds in June—its largest capital raise in fifty years. Per Crunchbase News, the split is deliberate: Menlo Ventures Seventeen targets seed and Series A companies, while an Inflection fund backs later-stage startups from Series B onward. Both funds are betting on artificial intelligence across foundational models, infrastructure, and applications. As Matt Murphy, a partner at Menlo, explained, AI companies require substantially more capital than software startups of earlier eras and are staying private considerably longer. The firm's approach has evolved to back founders from company inception through hypergrowth, concentrating larger checks—up to one hundred million dollars—on standout companies like Suno and Lovable. Menlo's long-running investment in Anthropic shaped this strategy. Murphy also outlined a significant market shift underway: companies are moving from Phase One, where they pick a model to build on, to Phase Two, where they're optimizing infrastructure and spending. Across the AI sector, the critical bottleneck emerging is how to get new code into production faster, safely, and securely.

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