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 Morning Dispatch |
Menlo Ventures on AI slowdown; Ola Electric CEO pledges stake
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Happy Monday! Menlo Ventures, an early Anthropic backer, says the real AI constraint is compute, not a slowdown in frontier models. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Listed startups’ <a href="https://bitcomme.com/how-investors-may-respond-to-oracle-orcl-ai-and-cloud-launches/” title=”How Investors May Respond To Oracle (ORCL) AI And Cloud Launches”>investors cash out
■ Small-biz lenders’ growth falls
■ Brands plan for festive season
Frontier AI slowdown a distraction, compute is the real constraint: early Anthropic backer Menlo Ventures
Matt Murphy (left) and Venky Ganesan, partners, Menlo Ventures
Menlo Ventures, which first backed Anthropic in 2023 when it was pre-product and pre-revenue, says a slowdown in frontier model development will not significantly affect foundation model companies or the broader AI market.
The real constraint:Partner Matt Murphy, who led Menlo’s Anthropic investments, called the slowdown “a bit of a red herring”.
The frontier models “are already intelligent enough to serve the market in front of us, and that makes for an enormous market for all the AI companies,” Murphy told ET in an interview at the San Francisco-based venture capital firm’s headquarters in Menlo Park.
Anthropic bet pays off: Menlo bet big on Anthropic in 2024, leading a $750 million funding round at a valuation of about $18.4 billion, the largest cheque in the firm’s history. Its stake was estimated at nearly $14 billion by June, per Bloomberg. On the back of this, Menlo raised $3 billion across two new funds in June, the largest corpus in its 50-year history.
Menlo’s AI portfolio: Menlo’s other AI bets include Suno, Lovable, Modal and work assistant Town. It also seeded OpenRouter, which Stripe agreed to acquire in August for about $7.5 billion.
“We believe there is likely to be an enterprise and consumer-focused version of these assistants, just like Anthropic broke enterprise and OpenAI consumer,” Murphy said. “The Town team is exceptional and we believe they have the right ingredients to dominate the enterprise segment.”
‘Best of times and worst of times’: Partner Venky Ganesan said the market is pulling in two directions. “On one hand, we have companies growing at a pace we have never seen, going from zero to $1 billion in revenue in 18 months. On the other hand, we have 3- to 5-person startups commanding valuations in the billions of dollars,” he said.
Ola Electric promoter Bhavish Aggarwal pledges 4.32% stake to fund rights issue
Bhavish Aggarwal, founder and CEO, Ola Electric
Ola Electric promoter Bhavish Aggarwal has pledged a 4.32% stake in the company to fund his subscription to its proposed rights issue, the company said in a regulatory filing on Sunday.
Driving the news:“This pledge is solely to fund his subscription to the issue, and there are no other pledges to his securities currently; no shares are being sold,” the company said, adding that Aggarwal will invest in the rights issue alongside other shareholders on the same terms.
Investors’ bets on Ola shrink as EV, ride-hailing businesses lose ground
The value of holdings in Bhavish Aggarwal’s Ola businesses has shrunk dramatically from their peaks for major investors including SoftBank, Warburg Pincus, Temasek, Tiger Global and Z47, as Ola Electric and Ola Cabs face intensifying competition and falling revenue.
Driving the fall:ANI Technologies, which operates Ola Cabs, peaked at a $7.3 billion valuation in 2021. By the end of February this year, US asset manager Vanguard had marked down its fair-value assessment to just $70 million – nearly 99% below the peak.
Ola Electric listed in August 2024, with the combined holdings of four major investors peaking at Rs 19,512 crore. The stock closed at Rs 37 on Thursday, valuing the company at Rs 17,162 crore – about half its IPO price of Rs 76.
Listed startups unlock Rs 25,000 crore for VC, PE investors
India’s startup investors realised about Rs 25,000 crore through block and bulk deals across 18 listed startups in July–September, our analysis showed.
Why it matters: These sales give funds cash to return to their backers while retaining exposure to future growth.
The backdrop: FPIs withdrew more than Rs 3.05 lakh crore from secondary markets in January–September. Bessemer’s partner and India chief operating officer Nithin Kaimal said domestic investors were helping absorb supply from quality companies alongside foreign funds.
Staying invested:While investors cashed out thousands of crores, they still continue to hold onto sizeable stakes, underlining long-term conviction in new-age companies. “We are holding much more than what we are selling,” Elevation managing director Mridul Arora said.
Small-business lenders’ growth cools in FY26 amid credit headwinds
Fintech lenders focused on small-business loans saw growth moderate in fiscal 2026 as they slowed disbursements and prioritised asset quality and cost discipline amid a challenging credit environment.
What’s the news:Stress among highly leveraged borrower segments prompted tighter underwriting, while geopolitical uncertainty from the West Asia conflict weighed on lenders’ risk appetite toward year-end.
- Revenue and loan book were broadly flat at Indifi; AUM fell 21.5% at NeoGrowth and 74% at Lendingkart.
- FlexiLoans’ lending entity, Epimoney, grew AUM just 10% in the first nine months.
- WeRize and Progcap bucked the trend, aided by models extending beyond pure balance-sheet lending.
- Indifi returned to profitability with a Rs 5 crore net profit versus a Rs 45 crore loss in FY25, as credit costs fell 40% and operating expenses declined 12%.
- NeoGrowth’s AUM fell to Rs 2,119 crore from Rs 2,700 crore, with revenue dropping to Rs 589.9 crore and a net loss of Rs 72 crore.
Other Top Stories By Our Reporters
Price hikes unlikely to cost brands this festive season:Despite repeated price hikes driven by rising raw material and logistics costs, consumer brands and ecommerce platforms are betting on a resilient festive season, with discounts, financing options and pent-up demand expected to keep shoppers spending, founders and executives told ET.
Kissht parent’s AUM rises in September quarter:Bengaluru: Digital lender Kissht’s parent OnEMI Technology Solutions reported a 68.4% year-on-year increase in assets under management (AUM) to Rs 9,317 crore at the end of the September quarter, as loan disbursements picked up and the company continued to expand its secured lending business.
■ Meet the new movie villains: Zuckerberg, Musk and Altman (FT)
■ Who gets to decide if AI is safe? Africa wants a say (Rest of World)
■ Are AI models the next big danger for body image? (BBC)
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