Inside AI Unicorn Anthropic’s Unusual $750 Million Fundraise
While artificial intelligence startup OpenAI reportedly ended the year discussing a fundraise at a valuation of $100 billion or more, one of its leading challengers, Anthropic, was accepting a round of its own. Appearing almost modest in comparison, Anthropic was raising $750 million in new funding that would nearly quadruple its valuation to $18.4 billion.
New details of the unusual round, which remains in progress, reveal how lead investor Menlo Ventures used an increasingly popular tactic to jump to the front: a special purpose vehicle, or SPV. The impetus to do the round, according to multiple sources, came from an opportunistic Menlo seeking to double down on a position in one of AI’s leading unicorns ahead of a potential larger round later in 2024, once Anthropic’s revenue had grown. For a previously small shareholder, it was a power play. For Anthropic, a painless way to burnish its war chest amid a hiring and product race.
Anthropic hadn’t been planning to do a round at the end of 2023 at all: the startup had previously signaled to interested investors that it preferred to wait until the second half of 2024 to make a formal fundraising push, according to four people with knowledge of the process. But Menlo’s offer made sense: the company gained a cash infusion at a critical juncture with minimal fuss, while also formalizing terms for two others promised by key cloud computing partners, Amazon and Google.
Read the full story on Forbes: https://www.forbes.com/sites/alexkonrad/2024/01/11/anthropic-750million-funding-round-menlo-ventures/?sh=586036c96e23
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New details of the unusual round, which remains in progress, reveal how lead investor Menlo Ventures used an increasingly popular tactic to jump to the front: a special purpose vehicle, or SPV. The impetus to do the round, according to multiple sources, came from an opportunistic Menlo seeking to double down on a position in one of AI’s leading unicorns ahead of a potential larger round later in 2024, once Anthropic’s revenue had grown. For a previously small shareholder, it was a power play. For Anthropic, a painless way to burnish its war chest amid a hiring and product race.
Anthropic hadn’t been planning to do a round at the end of 2023 at all: the startup had previously signaled to interested investors that it preferred to wait until the second half of 2024 to make a formal fundraising push, according to four people with knowledge of the process. But Menlo’s offer made sense: the company gained a cash infusion at a critical juncture with minimal fuss, while also formalizing terms for two others promised by key cloud computing partners, Amazon and Google.
Read the full story on Forbes: https://www.forbes.com/sites/alexkonrad/2024/01/11/anthropic-750million-funding-round-menlo-ventures/?sh=586036c96e23
Forbes Daily Briefing shares the best of Forbes reporting on wealth, business, entrepreneurship, leadership and more. Tune in every day, seven days a week, to hear a new story. Subscribe here: https://art19.com/shows/forbes-daily-briefing
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Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:
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TechTranscript
00:00 Here's your Forbes Daily Briefing for Tuesday, January 16th.
00:05 Today on Forbes, inside AI unicorn Anthropic's unusual $750 million fundraise.
00:14 While artificial intelligence startup OpenAI reportedly ended the year discussing a fundraise
00:19 at a valuation of $100 billion or more, one of its leading challengers, Anthropic, was
00:25 accepting a round of its own.
00:28 Appearing almost modest in comparison, Anthropic was raising $750 million in new funding that
00:34 would nearly quadruple its valuation to $18.4 billion.
00:39 New details of the unusual round, which remains in progress, reveal how lead investor Menlo
00:44 Ventures used an increasingly popular tactic to jump to the front, a special purpose vehicle
00:50 or SPV.
00:51 The impetus to do the round, according to multiple sources, came from an opportunistic
00:56 Menlo seeking to double down on a position in one of AI's leading unicorns ahead of
01:01 a potential larger round later in 2024, once Anthropic's revenue had grown.
01:07 For a previously small shareholder, it was a power play.
01:10 For Anthropic, a painless way to burnish its war chest amid a hiring and product race.
01:16 Anthropic hadn't been planning to do a round at the end of 2023 at all.
01:20 The startup had previously signaled to interested investors that it preferred to wait until
01:24 the second half of 2024 to make a formal fundraising push, according to four people with knowledge
01:29 of the process.
01:31 But Menlo's offer made sense.
01:33 The company gained a cash infusion at a critical juncture with minimal fuss, while also formalizing
01:38 terms for two others promised by key cloud computing partners, Amazon and Google.
01:44 Some investors were caught off guard by Menlo's aggressive move.
01:47 One existing investor said, "We complained to the company that the company just has so
01:52 much demand for the product, and they apologized because they don't have time."
01:58 Last week, Menlo Ventures disclosed the SPV, called Menlo Inflection AI Partners, in a
02:03 regulatory filing, saying the firm planned to raise $500 million for the round.
02:09 The additional $250 million comes from Menlo's own funds and contributions from insiders,
02:14 a source with knowledge confirmed.
02:16 It is also expected to include pro rata for investors that have such rights, including,
02:21 one source said, Spark Capital, the venture fund with the only seat on Anthropic's board
02:26 of directors.
02:27 Other shares are earmarked for Anthropic employees, this according to two sources.
02:33 Anthropic declined to comment in response to detailed questions about the round.
02:37 Menlo Ventures and Spark Capital both declined to comment.
02:40 The tech-focused business publication, The Information, previously reported the first
02:44 word of the round, while news website Semaphore reported the use of an SPV.
02:50 The origins of Anthropic, which is known for the large language model and chat GPT challenger
02:55 Claude Tu, are in research.
02:57 Dario Amodei, the co-founder and CEO of Anthropic, is not known to enjoy fundraising, according
03:03 to multiple sources.
03:05 One of Anthropic's technical leaders told investors that outsourcing the fundraising
03:09 to Menlo had given them more time to code, said one source.
03:13 The person, who was not authorized to speak, added, "It's about saving time.
03:18 Here's inbound interest that can get a round done at a threshold that's interesting and
03:22 figure the rest out later."
03:25 For full coverage, check out Alex Conrad and David Jeans' piece on Forbes.com.
03:31 This is Kieran Meadows from Forbes.
03:34 Thanks for tuning in.
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