Inside Menlo's Anthropic bet: the S-1, the $500M SPV, and a 19-year growth arc in a third of the time
Key points
Key takeaways from the The Peel interview with Menlo Ventures Managing Director Matt Murphy on Anthropic (October 2026):
S-1 fundamentals first. On Anthropic's freshly filed S-1, Murphy says the metrics that matter are operating cash flow, gross margin and growth rate — not the headline "-$42M burned" figure, which he calls a non-cash charge from warrants and convertible notes rather than a cash burn number. Anthropic is operating-cash-flow positive, he says, and expects to stay that way.
A growth curve in fast-forward. Murphy compares Anthropic with Google, which he saw up close from Kleiner Perkins: roughly zero to $1B revenue in five years, $1B to $10B in eight, and $10B to $100B in eleven more — 19 years to $100B. Anthropic has run a similar arc in about a third of that time: "a different phenomenon".
An uncomfortable first cheque. Menlo participated in Anthropic's Series C in 2022-23 — pre-revenue, pre-launch, at a $4B+ valuation that would once have been a spectacular exit. A $4.5B entry "doesn't move the needle unless it's a 10x" for a venture fund, and growth funds could not do pre-revenue, so Menlo bent its own rules to take part, with the goal of leading the next round.
Amazon and Google set the path. With OpenAI dominant on the consumer side, Anthropic partnered with Amazon and Google for compute, distribution and technology — and found its market in the enterprise, the faster and more lucrative route Murphy says "catapulted them to number one". Revenue went from near zero at launch in April to a reported ~$85M by the end of that year.
A first-ever $500M+ SPV. After an Anthropic executive (Nero, a "stealth warrior") blew away Menlo's LPs at the firm's November LP meeting, Menlo — a $750M fund at the time — raised an SPV almost the same size at a ~$18B valuation to lead the next round, its first SPV ever.
Why researchers chose Dario. Murphy contrasts Dario Amodei, "a true technologist" who builds technology and recruits researchers, with Sam Altman, whom he frames as a business person and "deal guy". Anthropic's low-drama culture, he says, has stood out against its peers.
The early-growth band is compressing. Menlo's Inflection fund defined early growth as roughly $3-10M ARR — a milestone that once took 12-18 months and now takes about a week for some AI companies, with cohort members publicly claiming $10M days. The fund's strategy has evolved accordingly.
Bet on the model, not the app. To be a leading AI firm, Menlo reasoned it had to back one of the two main model companies: "the model is the heart and soul of this whole AI economy". Murphy's partners were aligned enough to "dream the dream" and let him go out on a limb and lead the bet.
Read more: The Peel · Menlo Ventures
