What happened
Melius, a startup founded by three ex-Ramp engineers, has raised a total of $25 million. The funding consists of a $5 million seed round led by General Catalyst and a $20 million Series A led by CRV. The company pivoted from an AI-powered performance marketing tool to a platform for generating creative assets like ad campaigns and videos.
According to TechCrunch, the team scrapped their entire original codebase after six months. Melius claims it passed $1 million in annualised revenue within two months of its July launch.
How the room's reading it
The AI creative generation market is seen as both crowded and hot. Competitors like Higgsfield are growing rapidly, but the Melius team's public framing is that the market is large enough to support multiple winners. Co-founder Joowon Kim told TechCrunch that heavy competition is a positive signal of strong customer demand.
The consensus among VCs, implied by the backing from CRV and General Catalyst, is that there's still room for well-funded teams with strong engineering backgrounds. The pivot isn't being read as a misstep. Instead, it's viewed as a sign of smart execution.
Sailfish's take
A full pivot and codebase burn is a brave move. We see it as a healthy signal. Too many teams get stuck defending their first idea, especially after taking funding for it. The hard part isn't building — it's knowing when to stop.
The Melius story isn't about the AI. It's about product discipline. They spotted their original tool didn't “have legs” and made the hard call to scrap it. That's a team that knows how to ship, and more importantly, when not to. The real lesson for builders isn't about creative tools. It's that your first idea is just a ticket to the game — be prepared to burn it.