{"id":3492067,"date":"2026-10-05T19:38:07","date_gmt":"2026-10-05T19:38:07","guid":{"rendered":"https:\/\/techingeek.com\/index.php\/2026\/10\/05\/after-factorys-public-spat-with-khosla-menlo-proudly-invests\/"},"modified":"2026-10-05T19:38:07","modified_gmt":"2026-10-05T19:38:07","slug":"after-factorys-public-spat-with-khosla-menlo-proudly-invests","status":"publish","type":"post","link":"https:\/\/techingeek.com\/index.php\/2026\/10\/05\/after-factorys-public-spat-with-khosla-menlo-proudly-invests\/","title":{"rendered":"After Factory\u2019s public spat with Khosla, Menlo proudly invests"},"content":{"rendered":"
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Menlo Ventures partner Matt Murphy and his team announced Monday in a blog post that the firm has invested in AI coding startup Factory.<\/p>\n

Menlo declined to comment on how much it invested but said the deal was part of Factory\u2019s latest funding round announced last month at a $5 billion valuation. A source familiar with the deal told us the investment was significant to Menlo \u2014 not a token gesture \u2014 and that Menlo would have invested more had there been room on the cap table.<\/p>\n

Ordinarily, something like this wouldn\u2019t necessarily be news; startups often extend previous rounds to add new investors. But last week, Factory co-founder and CEO Matan Grinberg was embroiled in a very public airing of dirty laundry when he alleged that he had fired investor Chris Degnan of firm RPT Partners from his role as board advisor. Grinberg said he feared Degnan may have shared confidential information with Factory\u2019s biggest competitor, Cognition. The accusation followed Degnan\u2019s move to Cognition as its chief revenue officer.<\/p>\n

A who\u2019s who of the tech industry came out of the woodwork either to support Degnan and condemn Factory, or vice versa, but none was more surprising than Vinod Khosla. Khosla\u2019s firm is an investor in both Factory and Cognition. But that didn\u2019t stop the venerable VC from calling Factory a desperate \u201cstruggling second tier competitor,\u201d and accusing Grinberg of lying about firing Degnan and impugning his character. Degnan disputed Grinberg\u2019s story, saying he resigned and that he\u2019d rebuffed a competing job offer from Grinberg.<\/p>\n

So Menlo\u2019s full-throated endorsement of Factory, which praised its founders, its tech, and its relationship with its customers, is more than a feather in Factory\u2019s cap. It\u2019s a statement that Factory is not in the state that Khosla implied it was.<\/p>\n

Murphy famously bet his firm on Anthropic back when it appeared to be an also-ran to OpenAI and has been on a hot streak ever since, landing deals with Lovable and Legora, for instance. So now some VCs are calling Factory \u201cthe next Anthropic.\u201c<\/p>\n

Sequoia\u2019s Shaun Maguire, also a Factory backer who came out on X in support of Grinberg last week, appears thrilled with Menlo\u2019s endorsement, saying the firm is \u201con a tear.\u201d Notably, Menlo is not an investor in competitor Cognition.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

<\/div>\n
\n

Menlo Ventures partner Matt Murphy and his team announced Monday in a blog post that the firm has invested in AI coding startup Factory.<\/p>\n

Menlo declined to comment on how much it invested but said the deal was part of Factory\u2019s latest funding round announced last month at a $5 billion valuation. A source familiar with the deal told us the investment was significant to Menlo \u2014 not a token gesture \u2014 and that Menlo would have invested more had there been room on the cap table.<\/p>\n

Ordinarily, something like this wouldn\u2019t necessarily be news; startups often extend previous rounds to add new investors. But last week, Factory co-founder and CEO Matan Grinberg was embroiled in a very public airing of dirty laundry when he alleged that he had fired investor Chris Degnan of firm RPT Partners from his role as board advisor. Grinberg said he feared Degnan may have shared confidential information with Factory\u2019s biggest competitor, Cognition. The accusation followed Degnan\u2019s move to Cognition as its chief revenue officer.<\/p>\n

A who\u2019s who of the tech industry came out of the woodwork either to support Degnan and condemn Factory, or vice versa, but none was more surprising than Vinod Khosla. Khosla\u2019s firm is an investor in both Factory and Cognition. But that didn\u2019t stop the venerable VC from calling Factory a desperate \u201cstruggling second tier competitor,\u201d and accusing Grinberg of lying about firing Degnan and impugning his character. Degnan disputed Grinberg\u2019s story, saying he resigned and that he\u2019d rebuffed a competing job offer from Grinberg.<\/p>\n

So Menlo\u2019s full-throated endorsement of Factory, which praised its founders, its tech, and its relationship with its customers, is more than a feather in Factory\u2019s cap. It\u2019s a statement that Factory is not in the state that Khosla implied it was.<\/p>\n

Murphy famously bet his firm on Anthropic back when it appeared to be an also-ran to OpenAI and has been on a hot streak ever since, landing deals with Lovable and Legora, for instance. So now some VCs are calling Factory \u201cthe next Anthropic.\u201c<\/p>\n

Sequoia\u2019s Shaun Maguire, also a Factory backer who came out on X in support of Grinberg last week, appears thrilled with Menlo\u2019s endorsement, saying the firm is \u201con a tear.\u201d Notably, Menlo is not an investor in competitor Cognition.<\/p>\n<\/div>\n

When you purchase through links in our articles, we may earn a small commission. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n","protected":false},"author":2,"featured_media":3492068,"comment_status":"open","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3492067","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3492067"}],"collection":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/comments?post=3492067"}],"version-history":[{"count":0,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/posts\/3492067\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media\/3492068"}],"wp:attachment":[{"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/media?parent=3492067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/categories?post=3492067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techingeek.com\/index.php\/wp-json\/wp\/v2\/tags?post=3492067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}