Analysis
Menlo Ventures' recent funds are showing internal rates of return above 40%, driven almost entirely by its Anthropic position, which has grown from roughly $1 billion invested cumulatively across multiple funds and vehicles into a stake now worth $14 billion, according to a Newcomer scoop published July 16.
Menlo first invested in Anthropic's Series C back in 2023 and kept adding through successive rounds as the company's valuation climbed toward its current roughly $965 billion mark; the resulting position is now 10 times larger than Menlo's second-biggest investment ever, an extreme concentration that would be considered reckless portfolio construction at most venture firms but has instead become the defining story of Menlo's recent performance.
The firm's 2025 bets on Lovable, Wispr and Suno are also showing meaningful markups as Menlo goes all-in on AI more broadly, but none approach Anthropic's scale -- underscoring that Menlo's headline numbers are a story about conviction concentration in a single generational winner, not diversified portfolio construction paying off across many positions.
The performance directly fueled Menlo's $3 billion fundraise last month, announced as the firm turned 50, its largest fund close ever -- clear evidence that LPs are willing to reward an extremely concentrated AI bet with fresh capital rather than penalize the lack of diversification that a 40%+ IRR built on one company would normally invite scrutiny over.
The bear case: an IRR this dependent on a single private mark is only as real as Anthropic's eventual liquidity event, and marks can compress sharply if Anthropic's IPO -- reportedly moving closer with bankers lining up investor meetings -- prices below its private valuation, the same way SpaceX's public trade has come in below its own IPO price. What to watch next: how Menlo's Anthropic mark holds up once the company actually goes public, and whether Menlo's newest $3 billion fund can replicate anything close to this concentration in a new generational winner.
