Menlo Ventures joined Factory’s latest funding round at a $5 billion valuation, according to partner Matt Murphy’s Monday announcement. The investment adds a new backer after a public dispute involving Factory and an investor who moved to Cognition. Menlo did not disclose how much it invested, while saying the deal was part of the round Factory announced last month.
How did the investment take shape?
Matt Murphy and his team announced Menlo Ventures’ investment in a blog post on Monday. The firm said the investment formed part of Factory’s latest funding round, which Factory had announced the previous month at a $5 billion valuation. Menlo did not state the amount it committed. A source familiar with the deal described the investment as significant to Menlo and said the firm would have invested more if room had been available on the cap table.
The cap table is a record of a company’s ownership and investors. Startups sometimes extend an earlier funding round to bring in additional investors, according to the source account. The account did not say that Factory changed the round’s valuation or disclose any revised terms. Menlo’s announcement therefore adds an investor to the described round, while leaving the size and precise conditions of its own investment undisclosed.
What led to the public dispute?
The investment followed a dispute involving Factory co-founder and CEO Matan Grinberg and Chris Degnan, an investor who had served as a board advisor. Grinberg alleged that he had removed Degnan from that advisory role and feared Degnan might have shared confidential information with Factory’s largest competitor, Cognition. Degnan had moved to Cognition as its chief revenue officer. The account does not independently establish that confidential information was shared.
Degnan disputed Grinberg’s account of how their relationship ended. He said that he resigned and had rejected a competing job offer from Grinberg. The disagreement became a public exchange, with technology industry figures taking sides. Those competing accounts remain allegations and denials in the material available here, rather than a settled finding about what happened.
What does Menlo’s backing signal?
Menlo’s announcement praised Factory’s founders, technology and relationship with customers, according to the source account. That support came after Vinod Khosla criticised Factory and called it a “struggling second tier competitor”. Khosla’s firm invests in both Factory and Cognition, the account says. He also accused Grinberg of lying about firing Degnan and of impugning Degnan’s character; Grinberg’s allegations and Degnan’s response form part of the same dispute.
Menlo is not an investor in Cognition, according to the account. That distinction gives the investment a competitive context, but the source does not describe Menlo’s decision as a response to Khosla. It reports the backing and its timing, while leaving the firm’s internal reasoning unstated. The announcement is evidence of Menlo’s support for Factory, not independent confirmation of the claims exchanged in the dispute.
What remains undisclosed?
The investment amount and the round’s detailed terms remain undisclosed in the available account. It also does not provide a direct response from Cognition about Grinberg’s concern, or state whether any review of the alleged information sharing took place. The account gives no further detail on the board-advisor disagreement beyond the contrasting claims from Grinberg and Degnan. Those gaps limit what can be concluded about the dispute’s consequences.
For founders and investors, the distinction between reported backing and verified conduct matters. Menlo’s investment is reported as part of Factory’s round, while the source does not disclose the amount. The competing statements about Degnan remain attributed to the people involved. Further reporting would need to establish whether either side provides additional evidence or clarification.