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Menlo Ventures in Market for Next Set of Funds With AI Focus
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By Yuliya Chernova, WSJ Pro
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Good day. Silicon Valley stalwart Menlo Ventures is raising a new set of funds to invest in artificial-intelligence ventures, according to people familiar with the situation.
The Menlo Park, Calif.-based firm is targeting about $1.5 billion, one person said, with $650 million allocated for Menlo Ventures XVII, a fund focused on early-stage startups, and $850 million for Menlo Inflection IV, a pool for later-stage companies.
Menlo Ventures, founded nearly 50 years ago and known for its early investment in Uber Technologies among other deals, has been building out its AI expertise in recent years.
The firm first invested in Anthropic, a developer of large language models and a key rival to OpenAI, in 2023, and then doubled down on the company in 2024, leading an investment at an $18 billion valuation. This year, Menlo participated in a follow-on round for Anthropic, which was led by Lightspeed Venture Partners, that valued the company at $61.5 billion.
Menlo is also a co-investor with Anthropic in a venture fund called Anthology, which backs AI startups.
Read the full article.
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And now on to the news...
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PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Digital workers. Bank of New York Mellon said it now employs dozens of artificial intelligence-powered "digital employees" that have company logins and work alongside its human staff, The Wall Street Journal reports. Similar to human employees, these digital workers have direct managers they report to and work autonomously in areas like coding and payment instruction validation, said Chief Information Officer Leigh-Ann Russell. Soon they will have access to their own email accounts and may even be able to communicate with colleagues in other ways like through Microsoft Teams, she said. What the bank, also known as BNY, calls “digital workers,” other banks may
refer to as “AI agents.”
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12,400
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The approximate number of unsold companies that U.S. buyout firms held as of the first quarter of 2025, a seven- to eight-year backlog at the current pace of sales, PitchBook says.
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Stuck Private-Equity Deals Saddle Investors With Endless Fees
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Private equity’s three-year deal slump has worsened one of the industry’s longstanding problems: billions of dollars worth of aging, underwater funds that continue to cost investors money, WSJ Pro reports. The slowdown in mergers and acquisition that began in 2022 has made private equity less profitable and reduced the amount of money firms return to their investors. While this year began with high hopes of a recovery, the slump has persisted. Beyond hitting profits, the slump has delayed the timeline for private-equity firms to sell investments, adding to the pile of so-called tail-end funds, those a decade or more old.
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Cato Networks Raises $359 Million in Late-Stage Round
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Cyber company Cato Networks has raised $359 million in new funding, as security chiefs grapple with managing a growing array of suppliers and complex technology to secure their networks, WSJ Pro reports. Cato provides security technology, enabling applications, devices and workers to connect to a company’s systems through a single network that incorporates security processes as they connect. Vitruvian Partners and ION Crossover Partners led the Series G round. Existing investors, including Lightspeed Venture Partners, Acrew Capital and Adams Street Partners also participated.
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Funds
Project A, a European early-stage investor with offices in London and Berlin, closed its oversubscribed €325 million Fund V, increasing the firm’s total assets under management to €1.2 billion.
Galaxy Ventures closed its inaugural fund with more than $175 million in commitments to make early-stage investments in startups developing critical infrastructure and applications for the onchain economy.
Counterpart Ventures raised $132 million for its third fund, bringing the San Francisco-based firm’s assets under management to $250 million.
People
Emerging, a growth capital firm investing in restaurant-entertainment concepts and restaurant technology companies, appointed G.J. Hart as managing partner. He was previously president and chief executive officer of Red Robin Gourmet Burgers.
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Raphe mPhibr, an India-based aircraft manufacturer, picked up a $100 million investment led by General Catalyst.
XBOW, an automated penetration testing startup, scored $75 million in Series B funding led by Apoorv Agrawal at Altimeter Capital Management.
Beep, a startup launching this country’s first fully autonomous public transit system, collected a $52.7 million investment co-led by Intel Capital and Blue Lagoon Capital. The company also appointed Kevin Reid its new chief executive officer.
Audos, a New York-headquartered startup that finds and develops entrepreneurs to build AI businesses, secured $11.5 million in combined pre-seed and seed funding led by True Ventures.
Bonx, a Paris-based startup using AI to help mid-market manufacturers optimize their operations, was seeded with an $8.6 million investment led by 9900 Capital.
Serve First, a U.K.-based customer experience and feedback management platform, landed £4.6 million from investors including Pembroke VCT, Mercia Ventures and Techstars.
Aircon, a startup building AI-powered software for freight forwarders, closed a $5 million seed round co-led by Blumberg Capital and Las Olas Venture Capital.
LogicFlo AI, a Boston-based provider of AI agents for life sciences teams, raised $2.7 million in seed funding led by Lightspeed.
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ILLUSTRATION: STEPHEN BLISS
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