Menlo Ventures backs Factory days after Vinod Khosla’s public jab

Key Summary

Menlo Ventures has invested in Factory, an AI startup backed by Vinod Khosla's firm Khosla Ventures, following Khosla's public criticism of Factory as a "struggling second-tier competitor". The investment, led by partner Matt Murphy, occurred during Factory's key fundraising stage and contrasts with Khosla's comments. Factory has raised $200 million at a $5 billion valuation and now exceeds $400 million in funding. The company counts notable clients such as NVIDIA, Blackstone, and Palo Alto Networks, serving hundreds of thousands of developers. Menlo's move signals its support for Factory, while Khosla's remark suggests a preference for another backed company, Cognition, which raised $2 billion at a $48 billion valuation.