Menlo Ventures Backs AI Coding Startup Factory
Menlo Ventures invested in Factory as part of the startup's latest funding round, announced in September 2026 at a $5 billion valuation.
Menlo Ventures has invested in AI coding startup Factory, the firm said in a blog post, according to TechCrunch. Menlo declined to disclose the amount, saying only that the deal was part of Factory's latest funding round.
A source said the investment was significant for Menlo and that the firm would have invested more had there been room on the cap table.
The investment follows Factory's latest funding round, announced in September 2026 at a $5 billion valuation.
The funding news arrives amid a public dispute around Factory. Last week, co-founder and CEO Matan Grinberg alleged he fired investor Chris Degnan of RPT Partners from his board advisor role, saying he feared Degnan may have shared confidential information with Factory's competitor Cognition. Degnan disputed that account, saying he resigned and had rebuffed a competing job offer from Grinberg. Degnan moved to Cognition as its chief revenue officer before the accusation.
Investor ties and public sparring
Vinod Khosla's firm is an investor in both Factory and Cognition. Khosla called Factory a desperate "struggling second tier competitor." Menlo is not an investor in Cognition. Shaun Maguire of Sequoia came out on X in support of Grinberg last week. Matt Murphy previously bet Menlo on Anthropic when it appeared to be an also-ran to OpenAI.
Quick answers
How much did Menlo Ventures invest in Factory?
Menlo declined to disclose the investment amount. A source said the investment was significant for the firm and that it would have invested more had there been room on the cap table.
What valuation did Factory's latest funding round carry?
Factory's latest funding round was announced in September 2026 at a $5 billion valuation.
What is the dispute between Matan Grinberg and Chris Degnan?
Grinberg alleged he fired Degnan from his board advisor role at Factory, saying he feared Degnan may have shared confidential information with competitor Cognition. Degnan said he resigned and had rebuffed a competing job offer from Grinberg.