The Mercedes-Benz name is made up of two names. “Benz” comes from Karl Benz, one of the founders of the company—though the company was originally called Daimler-Benz (after cofounders Benz and Gottlieb Wilhelm Daimler).
The name Mercedes comes from Mercedes Jellinek, the daughter of a key engineer (Emil Jellinek) who helped create the Mercedes 35hp way back in 1900. After naming that car (and subsequent cars) after Jellinek’s daughter, Mercedes-Benz eventually replaced the Daimler-Benz company name.