In a dynamic move to bolster the next generation of artificial intelligence startups, Anthropic and Menlo Ventures have teamed up to create a $100 million fund known as the Anthology Fund. This initiative, announced on July 17, sets the stage for a wave of new AI innovations by offering significant financial backing and robust support to early-stage companies.
The fund will provide investments starting at $100,000, accompanied by $25,000 in credits for Anthropic’s cutting-edge AI technology. This model mirrors Apple’s collaboration with Kleiner Perkins over a decade ago, which supported the surge in iPhone application development through the iFund.
“The iFund was wildly successful; it gave Apple a lens into a whole set of early developers and their needs,” said Matt Murphy, a partner at Menlo Ventures. “There's a lot of parallels here, but AI is accelerating at a pace 10 to 100 times faster than iPhone development.”
Indeed, the speed of AI innovation has led to intense competition among venture capitalists to secure the most promising startups. According to Crunchbase, funding for AI startups jumped to more than $24 billion in the second quarter, more than doubling from the first quarter.
Anthropic, founded by siblings Dario and Daniela Amodei in 2020, has rapidly positioned itself as a leader in responsible AI development. The company competes directly with OpenAI, creators of the famous ChatGPT, and has been notably valued at $15 billion earlier this year following a substantial $750 million funding round led by Menlo Ventures.
The Anthology Fund aims not just to provide financial support but also to foster a community of innovators. Anthropic will offer coaching, quarterly meetups, and direct access to its team, creating an environment where startups can flourish. One unique aspect of the fund is the involvement of Claude, Anthropic’s AI chatbot, which will assist in recommending potential investment candidates.
“We are using Claude as part of an automation workflow to manage the influx of applications,” said a spokesperson from Menlo Ventures. “However, the ultimate decision of which founders and startups we back will be the responsibility of the investment committee.”
Tim Tully, another partner at Menlo Ventures, highlighted that the fund is particularly keen on startups enhancing the AI ecosystem with novel applications in fields such as healthcare, law, fintech, and biology. Tully emphasized the importance of infrastructure startups, especially those focused on AI developer platforms and safety tools.
“Agents are going to be massive,” Tully noted. “A place to run agents would be a strong example of infrastructure that Anthropic could potentially use.” However, the fund will not invest in large language model providers, viewing such an investment as a conflict of interest.
Applicants to the Anthology Fund are encouraged to demonstrate their products through demos or videos, significantly boosting their chances of selection. Selected startups will gain access to Menlo's San Francisco and Menlo Park offices, participate in biannual demo days, and benefit from deep dives into technology trends with both Menlo and Anthropic leaders.
“Our goal here is to provide that initial push that’s often a deterrent due to cost,” said Daniela Amodei. “We want to contribute to the community by offering credits and guidance to get started in the ecosystem.”
The launch of the Anthology Fund also underscores the rapid growth and intense interest in the AI sector, which continues to attract significant investments and inspire new technological developments. With global startup funding reaching record highs, this fund positions Anthropic and Menlo Ventures at the forefront of AI innovation.
As the world anticipates the next groundbreaking AI applications, the Anthology Fund stands as a testament to the transformative potential that lies in nurturing early-stage startups. Through strategic investments and dedicated support, Anthropic and Menlo Ventures are not only propelling the AI industry forward but also creating a vibrant ecosystem where the next generation of AI solutions can thrive.