SpaceX made it official yesterday, acquiring xAI ahead of the decade's most hotly anticipated IPO.

Why it matters: Elon Musk is making one of the most audacious moves in the history of business and tech, arguably betting his empire on the idea of orbital data centers that are powered by the sun.

• Don't be surprised if this is a prelude to a future merger with Tesla, which recently invested $2 billion into xAI.
• Tesla would make the chips and batteries, SpaceX would be responsible for launch and satellites, and xAI would build the models and agentic networks.

The big picture: If this works, it could pose a major threat to OpenAI — the only AI giant it's tough to see Musk partnering with or selling services to.

By the numbers: The combined company is being valued at around $1.25 trillion.

• This includes a 25% valuation step-up for SpaceX, to $1 trillion from a recent $800 billion mark via a secondary offering.
• xAI would be valued at around $250 billion, also a valuation increase, but not as much on a percentage basis.

Zoom in: SpaceX investors need to buy into Musk's grand vision if they'd like to remain sane, because the finances of this all-stock merger are ludicrous.

• They're adding what one investor in both companies called "a money-burning laggard," which dilutes SpaceX shareholders and makes its IPO story much more complicated.
• IPO bankers have obviously blessed the deal, but how can they really object when Musk is about to make their careers (and help them buy that boat)?

Behind the scenes: A lot of big unicorn companies have stayed private longer because they don't really need cash or shareholder liquidity, thanks to a vibrant venture market that's become amenable to tenders and other secondary offerings.

• SpaceX, however, needs money for its massive construction projects — more than is available in the private markets. It's going public out of capital necessity, not choice.

Last laugh: For xAI investors, this is something of a bailout. Similar to what the xAI-X merger was for those who helped take Twitter private.

• In short, those who bet on Musk without asking too many questions (e.g., Marc Andreessen) are being rewarded for their unwavering faith.
• And Musk is making good on what he told me in late 2023: "I have never lost money for those who invest in me and I am not starting now."

The big question: Will public market investors agree with the $1.25 trillion valuation when they finally see the combined company's financials? If so, it would be the ninth largest U.S. company by market cap, besting Berkshire Hathaway and Walmart.

• There also are new risk factors being introduced. Just this morning, French officials raided X's office in Paris, as part of what BBC reports is "an investigation into suspected offences including unlawful data extraction and complicity in the possession of child pornography."

The bottom line: Musk's work at Tesla always has been with an eye toward making enough money to get humans to Mars.

• But he needs a bigger revenue stream — well beyond earthbound electric vehicles or social media platforms. So that's what he's still trying to build.

Cavu Consumer Partners tells Axios that it raised $325 million for its fifth fund, with a continued focus on better-for-you products.

Why it's the BFD: Big CPG companies are playing catch-up on Gen Z and millennial health trends, which means there are both entry and exit opportunities for startups.

• Limited partners, meanwhile, are turning to dedicated consumer VC funds because so many generalists have exited the sector.

Zoom in: This is Cavu's largest fund since it was founded over a decade ago, besting its $275 million target.

• It will continue to focus on food and beverage products — the new fund's first investment is in magnesium-based drink brand Recess — plus wellness, beauty, and pet startups.
• Portfolio companies have included Poppi, which was purchased by Pepsi last year for nearly $2 billion, and Once Upon a Farm, which is expected to go public this week.

The bottom line: "Something we didn't expect is a lot of the political action that's happened to force changes in our food system. We're now seeing states and school systems all start to ban certain ingredients that were allowed here but banned in places like Europe and Canada, so that creates another secular win in terms of adoption.

• "It's hard for Democrats and Republicans to agree on anything, let alone now, but there does seem to be bipartisan momentum on this, despite lobbying efforts being very heavy." — Brett Thomas, Cavu co-founder and managing partner

• Waymo, the robotaxi unit of Alphabet, raised $16b. Dragoneer, DST Global, and Sequoia Capital led, joined by a16z, Mubadala, Bessemer Venture Partners, Silver Lake, Tiger Global, T. Rowe Price, BDT & MSD Partners, CapitalG, Fidelity, GV, Kleiner Perkins, Perry Creek Capital, and Temasek. axios.link/4atBK3J

🚑 Midi Health, an LA-based women's midlife health care company, raised $100m in Series D funding at a valuation north of $1b, per Axios Pro. Goodwater Capital led, joined by Foresite Capital, Serena Ventures and insiders Advance Venture Partners, Google Ventures, Emerson Collective, SemperVirens, and McKesson Ventures. axios.link/4byBjWR

• GenLogs, an Arlington, Va.-based freight intelligence startup, raised $60m in Series B funding. Battery Ventures led, joined by IVP, Cathay Innovation, 9Yards, Venrock, Steel Atlas, HOF Capital, TitletownTech, and Autotech Ventures. axios.link/4kkIXGU

🚑 Alaffia Health, an agentic AI platform for health plan claims, raised $55m in Series B funding. Transformation Capital led, joined by insiders FirstMark Capital, Tau Ventures, and Twine Ventures. axios.link/4asuwwW

🌎 GrubMarket, an SF-based food supply chain startup, raised $50m in Series H funding at a $4.5b pre-money valuation from Future Food Fund, Portfolia Funds, Liberty Street Funds, RD Heritage Group, Flume Ventures, and MY Securities. axios.link/4rlATrA

• Rapidfort, an SF-based software supply chain security startup, raised $42m in Series A funding. Blue Cloud Ventures and Forgepoint Capital led, joined by Felicis Ventures, Alumni Ventures, Boulder Ventures, Brave Capital, Evolution Ventures, Florida Funders, Gaingels, and Mana Ventures. axios.link/4rs8Fvh

🚑 Lotus AI, a developer of AI doctors, raised $35m in Series A funding led by CRV and Kleiner Perkins. lotus.ai

• Orion Security, an Israeli data loss security startup, raised $32m in Series A funding, per Axios Pro. Norwest led, joined by IBM and insiders Pico Venture Partners and Lama Partners. axios.link/4tcGVwb

• Radicl, a Boulder, Colo.-based cybersecurity startup focused on defense and critical infrastructure SMBs, raised $31m in Series A funding, per Axios Pro. Paladin Capital Group led, joined by Access Venture Partners, Denver Ventures, and Cervin Ventures. axios.link/3OiOotD

• Sixfold, a New York-based AI underwriting insurtech, raised $30m in Series B funding. Brewer Lane led, joined by Guidewire, Bessemer Venture Partners, and Salesforce Ventures. axios.link/4qeRwEs

⚡Avalanche Energy, a Seattle-based fusion energy startup, raised $29m. RA Capital Management led, joined by 8090 Industries, Overlay Capital and insiders Congruent Ventures, Founders Fund, Lowercarbon Capital, and Toyota Ventures. axios.link/4qdDnak

• Mitra EV, an LA-based electric fleet startup, raised $27m in equity and debt funding, with Ultra Capital leading the equity, per Axios Pro. axios.link/4q8nuC1

⚡️ Additive Drives, a German electric motor maker, raised €25m from Nordic Alpha Partners. axios.link/3O1XCKM

• Pasito, a workspace for group health, life, and retirement benefits, raised $21m in Series A funding. Insight Partners led, joined by YC and MTech Capital. axios.link/4bzAwoO

• Day AI, a Boston-based developer of "Cursor for CRM," raised $20m in Series A funding. Sequoia Capital led, joined by Sound Ventures, Permanent Capital, Conviction, and Greenoaks. axios.link/49TjrVv

• Kasada, an Australian enterprise cybersecurity startup, raised US$20m. EQT led, joined by insiders Ten Eleven Ventures, Main Sequence Ventures, Reinventure, Our Innovation Fund, StepStone Group, and Turnbull & Partners. kasada.io

⚡ XFuel, an Irish developer of low-carbon marine fuel, raised $20m in Series A funding from Wagner Carson, Audacy, Future Planet Capital, Light Ray Ventures, Overlap Holdings, USV, AENU, SOSV, NYK Line, and Stolt Ventures. axios.link/4qNoAEu

• Linq, a Birmingham, Ala.-based developer of a communication layer for AI agents, raised $20m in Series A funding from TQ Ventures and Mucker Capital. axios.link/3ZJXdz8

• GoCab, a drive-to-own mobility fintech, raised $15m led by E3 Capital and Janngo Capital, with participation from KawiSafi Ventures and Cur8 Capital. It also secured $30m in debt. gocab.io

🚑 Synthpop, a Cambridge, Mass.-based developer of AI agents for health insurance workflows, raised $15m in Series A funding, per Axios Pro. Ansa led, joined by Defy.vc, Peterson Ventures, Storm Ventures, and ex-Humana CEO Bruce Broussard. axios.link/4a6eUOg

• Ditto, a college dating app, raised $9.2m in seed funding. Peak XV Partners led, joined by Gradient, Scribble Ventures, Alumni Ventures, and Llama Venture. ditto.ai

⚡ Powerline, a Palo Alto-based provider of software for grid-scale batteries, raised $7m in seed funding, per Axios Pro. MaC Venture Capital led, joined by LG Technology Ventures and J-Impact. axios.link/3Zb5n3x

• Polaron, a London-based material science intelligence startup, raised $8m. Racine2 led, joined by Speedinvest and Futurepresent. axios.link/4atwSeX

🌍 UBEES, a French developer of beekeeping applications for regenerative agriculture, raised €8m in Series A funding. Starquest and Capagro led, joined by Newtree Impact. axios.link/3NSqk0K

🌍 Sparxell, a British developer of bio-based replacements for synthetic colorants, raised $5m. Swen Capital Partners led, joined by Alpha Star Capital and Cambridge Enterprise. axios.link/4qTyPqJ

• Enclaive, a German cybersecurity startup focused on confidential computing, raised €4.1m in seed funding. Join Capital and Amadeus APEX Technology Fund led, joined by Auriga Cyber Ventures. axios.link/4kf4m45

• The Six Bells, a hospitality brand founded by Audrey Gelman (The Wing), raised $3.8m in seed funding. Female Founders Fund led, joined by Lerer Hippeau Ventures, Brian Chesky, and Soho House's Nick Jones. axios.link/3ZdKCnU

🚑 Lateral, a British health and financial wellbeing platform for users over 60, raised £2.5m in seed funding. Augmentum led, joined by Triple Point and TinyVC. axios.link/4qkFGsl

• Berget AI, a Swedish sovereign AI startup, raised €2.1m. Luminar Ventures led, joined by Wellstreet and Norrsken Evolve. axios.link/4kd8q4X

• Apollo is making a minority investment in GoodLife Group, Canada's largest fitness club operator, at around a C$2b enterprise value, per Reuters. axios.link/3MbRnU5

🚀 Auria Space, an Enlightenment Capital portfolio company, acquired BCubed, a Roanoke, Va.-based provider of satellite communications software and engineering solutions. auria.space

• Bridgepoint and Polaris invested in PDSVISION, a Swedish digital engineering firm. axios.link/4r6KDGc

• Carolwood completed its carveout of the Indian motorcycle brand from Polaris (NYSE: PII). axios.link/3L6UEDc

⚡ Copenhagen Infrastructure Partners will pay $1.7b to buy the European onshore business of Ørsted. This comes after a U.S. judge ruled that Ørsted can resume work on an offshore wind farm in New York that had been blocked by the Trump administration. axios.link/49SSuBi

• Conga, backed by Thoma Bravo, completed its purchase of the B2B business of PROS Holdings, also a Thoma Bravo portfolio company that provides revenue management software to airlines. axios.link/4t8cBmt

⚡EQT and Global Infrastructure Partners partnered on a bid to acquire power company AES Corp. (NYSE: AES), which has a $10.5b market cap, per Bloomberg. axios.link/4qdB9rG

⚽ Kings League, a 7v7 soccer league, raised $63m from Alignment Growth. axios.link/4rtANhA

• Red Nucleus, backed by THL Partners, acquired Bridge Medical Consulting, a London-based health economics and outcomes research consultancy. axios.link/46u9Hib

• Rocket Software, a Bain Capital portfolio company, agreed to buy analytics database platform Vertica for $150m in cash from Open Text (TSX: OTEX). axios.link/4tdXnwn

🚑 RoundTable Healthcare Partners invested in Colorescience, a Carlsbad, Calif.-based skin-care and sun protection brand. axios.link/3M85zxw

• Skyline Investors acquired Buddy's Home Furnishings, a rent-to-own franchisor with more than 220 stores in 18 states. axios.link/3Mi1Eya

• TA Associates invested in The Forge Cos., an Atlanta-based provider of financial services to personal injury law firms and their clients. axios.link/3Z9FdhA

⚡ ARKO Petroleum, a fuel distribution subsidiary of ARKO (Nasdaq: ARKO), set IPO terms to 10.5m shares at $18-$20. It would have an $865m market cap, were it to price in the middle, and plans to list on the Nasdaq (APC). axios.link/4qWbULL

• Iris Acquisition II, an SMB SPAC formed by Arrow Capital, raised $150m in its IPO. axios.link/4rtxEhO

• Metals Acquisition II, a metals and mining SPAC, filed for a $200m IPO. axios.link/4rxufi4

• MOZAYYX Acquisition, a tech SPAC led by Benjamin Zucker (ex-R.F. Lafferty), filed for a $250m IPO. axios.link/49WJlYw

• Pono Capital Four, a tech SPAC, filed for a $150m IPO. axios.link/45Na7QB

• BCP sold Gray Surety, a Treasury-listed surety carrier, to Palomar Holdings (Nasdaq: PLMR). axios.link/3NV3XHV

• Marvell Technology (Nasdaq: MRVL) completed its $3.25b purchase of Celestial AI, a Santa Clara, Calif.-based developer of optical interconnect solutions that had raised nearly $600m from Fidelity, USIT, AMD Ventures, Koch Disruptive Technologies, Temasek, Tiger Global, IAG Capital Partners, Samsung Catalyst, Smart Global Holdings, Porsche, Engine Ventures, M-Ventures, and Tyche Partners. axios.link/49NNZZ8

• Marzetti Co. (Nasdaq: MZTI) agreed to acquire Japanese BBQ sauce brand Bachan's for $400m in cash. Bachan's had raised around $20m from firms like Sonoma Brands Capital, Prelude Growth Partners, New Fare Partners, GG 1978, and Simple Food Ventures. axios.link/4apOM2d

• Arcesium, backed by JPMorgan, acquired Limina, a Stockholm-based portfolio and order management systems provider. axios.link/4qezhPg

• Brookfield Asset Management agreed to buy industrial REIT Peakstone Realty Trust (NYSE: PKST) for around $1.2b in cash. axios.link/4ka3Cgy

• Edgewell Personal Care (NYSE: EOPC) completed the $340m sale of its North American feminine care unit, including the Stayfree brand, to Sweden's Essity. axios.link/4owyMA4

• EQT hired Arma Partners to sell Thinkproject, a German collaboration and workflow SaaS that could fetch up to €1.5b, per Bloomberg. axios.link/3ZOhoMq

• Fifth Third Bancorp (Nasdaq: FITB) completed its $19.9b purchase of Comerica. axios.link/3Mnyj5r

• Hain Celestial Group (Nasdaq: HAIN) agreed to sell its North America snacks business, including Garden Veggie snacks and Terra chips, to Canada's Snackruptors for $115m in cash. axios.link/45Mgpjr

⚡ Tennet, Germany's electricity transmission system operator, agreed to sell a 25.1% stake to the German government for €3.3b, after years of discussions. axios.link/49WuXj0

• Eterna Growth Partners has spun out from Charlesbank Capital Partners. It's made up of the team that ran Charlesbank's tech opportunities fund, which it will continue to manage as an independent entity. axios.link/4rodK7O

• Hamilton Lane raised over $1.5b for its second infrastructure opportunities fund, plus another $400m for related vehicles. axios.link/4tvQTcz

• Heartland Ventures of Columbus, Ohio, has secured $35m of a $60m-targeted third fund, per an SEC filing.

• HighVista Strategies raised $800m for its 11th flagship PE fund. for HighVista's private equity strategy. axios.link/3ZRQ8fW

• Motivate Venture Capital of Chicago is raising its third AI-focused fund, per an SEC filing.

• Otro Capital, a sports-focused PE firm formed by RedBird Capital Partners alumni. raised $1.2b for its debut fund. axios.link/46e0F8Y

• Project Level, a pro women's sports investment platform formed by Ariel Investments, held a $250m first close. axios.link/4qZBRtR

• Anna Barber joined Everywhere Ventures as a general partner. She previously was with M13, where she'll remain a board partner. axios.link/4asYFft

• Bregal Sagemount promoted Will Breskman to partner. axios.link/3ZMX0LE

🚑 Bill Kopitke, former head of health care for Amazon Business, joined Health Enterprise Partners as an executive-in-residence. axios.link/4bwd0ZN

• Gordon McKemie joined Lazard Asset Management as a managing director and head of leveraged loans and high yield. He previously was with Blackstone. axios.link/4aenNp3

• Great Hill Partners promoted Michael Noel to principal. axios.link/3ZeVz8K

• Prithvi Raj joined Waud Capital Partners as chief AI and data officer. He previously was with Newmark. axios.link/49XUok4

• Josh Seidenfeld joined DLA Piper as chair of its Northern California corporate and securities practice. He previously was with Cooley. axios.link/3ZaqfrJ

• Thompson Street Capital Partners promoted Tom St. Geme to managing director. axios.link/3Mi07Iq