Bonus Homes, a home equity sharing startup that pitches itself as an alternative to selling, raised $15.5 million in seed funding, Axios has learned.

Why it matters: This comes as Americans are increasingly tapping into their homes for cash.

Driving the news: Investors in the round include Solyco Capital, Redwood Trust, and Nextview Ventures, per sources.

• Another group of investors, including a16z Perennial, have committed $50 million to support Bonus' home-investing strategy.

Zoom in: Unlike better known financial instruments, such as HELOCs, Bonus Homes has created a structure that can cash out the homeowners equity and does not require a monthly repayment, per its site.

• Rather than exit the home via traditional sale, homeowners working with Bonus collect the equity from the current price, while retaining an ownership stake in the underlying property.
• Under the Bonus agreement, homeowners retain rights up to 35% of any property value appreciation, while Bonus will collect 65% of future appreciation, per the site. Bonus bears the maintenance costs and has the right to rent the property to generate a regular stream of income.
• The title remains in the homeowner's name, and they can sell between five and 30 years after striking the deal with Bonus.

Context: The home equity sharing industry has positioned itself as an alternative to home equity lending, which has helped avoid more onerous lending regulations.

• Older players in the industry include Unison and Point, notes Bankrate home lending expert Linda Bell.

Between the lines: The home equity sharing business model depends on reliably predicting which geographies will see rental demand remain strong and property prices continue to rise. For a venture-backed player, doing so at scale will be paramount.

The intrigue: The complexity of home equity contracts came under scrutiny under Biden's CFPB.

• Valuing the equity has been contentious because most players offer cash on a percentage of the home's equity. Bonus appears to rely more on the price at which the home will eventually sell and on rental income.
• "It's definitely still a young industry," says Bell. "There are new companies that are trying to make the agreement better."

What we're watching: This deal highlights Andreessen Horowitz's expansion into assets outside of venture capital, and is its first known deal with real-estate-like returns.

• According to sources with knowledge of the matter, a16z Perennial, the firm's multi-family office, is among investors committing about $50 million to fund Bonus' investment into homes.
• These investors will get a portion of the returns from a portion of Bonus' rental income, and will also share in upside (and risks) of changes in the housing prices.

Andreessen Horowitz declined to comment.

Windsurf shocked the tech world Friday when it was revealed that its deal to be acquired by OpenAI for $3 billion was dead.

• Instead, CEO Varun Mohan, cofounder Douglas Chen, and other employees will join Google, which will pay $2.4 billion in licensing fees and compensation.

Why it's the BFD: OpenAI's almost-deal for Windsurf widened cracks in its relationship with Microsoft, with OpenAI and Microsoft dueling over whether the latter would have access to Windsurf's IP.

The big picture: Regulatory scrutiny around Big Tech — and incestuous alliances between the AI companies — are making such quasi-mergers a staple of the industry.

Context: This deal echoes Microsoft's $650 million deal for Inflection AI last year, where Inflection exists in name, but its brains — CEO Mustafa Suleyman and key employees — would join Microsoft.

• Google inked a similarly structured deal with Character.ai last year, and there is Meta's $15 billion deal for a 49% stake in Scale AI earlier this year, that resulted in CEO Alexandr Wang joining the social media company.

The bottom line: Ironically, the more often such deals occur, the more likely they are to invite regulatory scrutiny.

• xAI, Elon Musk's AI business, is reportedly seeking a $200b valuation for its next raise, per the FT. The WSJ reports that Musk's SpaceX has agreed to invest $2b into the business. axios.link/40fYmzk

• Groq, the AI chip startup, is in talks to raise between $300m and $500m at a $6b valuation, per The Information. axios.link/4lizD5O

• Moonvalley, a Toronto-based foundational AI video model maker trained on licensed content, raised $84m led by General Catalyst. Creative Artists Agency CoreWeave, Comcast Ventures, Khosla Ventures and YCombinator also participated. moonvalley.com

• Spacelift, a Redwood City, Calif.-based data-center infrastructure automation platform, raised $51m in Series C funding led by Five Elms Capital, with participation from Endeavor Catalyst and Inovo VC. axios.link/3IoKRr1

• Tandem Health, a Stockholm-based clinical documentation startup, raised $50m in Series A funding. Kinnevik led, with participation from Northzone, and Amino Collective. axios.link/4eTnMJg

• Illimis Therapeutics, a Seoul-based CNS and immune disease drug developer, raised $42m in Series B funding from investors including DSC Investment, Woori Venture Partners, Korea Development Bank, LB Investment, TS Investment, and Shinhan Venture Investment. axios.link/40i7Nyb

• NetBox Labs, a New York-based network and infrastructure management company, raised $35m in Series B funding led by NGP Capital, with participation from Sorenson Capital, Headline, Flybridge Capital, Notable Capital, Mango Capital, Salesforce Ventures, Two Sigma Ventures, and IBM. netboxlabs.com

• Foundation EGI, a Los Altos, Calif.-based engineer automation startup, raised $23m in Series A funding led by Translink Capital with participation from RRE Ventures, McRock Capital, Escape Investment Management (Jim Scapa), Fifth Growth Fund. axios.link/4eKGT7W

• Motor Ai, a Berlin-based self-driving tech company, raised $20m in seed funding led by Segenia Capital and eCAPITAL. axios.link/4lOIv2T

⚡ Helical Fusion, a Tokyo-based fusion energy developer, raised $15m in Series A funding. Backers included SBI Investment and Keio Innovation Initiative. axios.link/44G2MRl

• Murphy, a Barcelona, Spain-based agent debt servicing business, raised $15m in pre-seed and seed funding led by Northzone, with participation from ElevenLabs, Lakestar, and Seedcamp. getmurphy.ai

• Zip Security, a New York-based cybersecurity business for SMEs, raised $13.5 million in Series A funding. Ballistic Ventures led and was joined by Silver Buckshot, The Chainsmokers' Mantis VC and return investors General Catalyst, Box Group and Human Ventures. axios.link/4lT4B4v

• Cogent Security, an SF-based vulnerability management company, raised $11m in seed funding led by Greylock Partners, per Axios Pro. axios.link/3GHv4D4

• LGND AI, a New York-based earth data business, raised $9m led by Javelin Venture Partners, with participation from AENU, Space Capital, Overture, Ridgeline, MCJ, Coalition Operators, and Clocktower Ventures. axios.link/4eQAKaG

• Helios, a NYC-based maker of an operating system for public policy professionals, raised $4m in seed funding led by Unusual Ventures, with participation from Founders and Alumni Ventures. heliosintel.ai

• Live Story, a Milan-based visual CMS provider, raised €2.7m in seed funding led by Vertis. axios.link/4nFH34R

• AURELIUS agreed to acquire DCC's (LON: DCC) Info Tech business in the U.K. and Ireland for about £100m. axios.link/40MFsQK

• Cerberus Capital Management and billionaire investor Dean Metropoulos teamed up on an unsuccessful bid for WK Kellogg (NYSE: KLG), which eventually went to Ferrero Group for $3.1b. axios.link/4ltobEE

• Cognosos, backed by Riverwood Capital and Cox Enterprises, acquired Cox 2M, the connected asset tracking and IoT business unit of Cox Communications. axios.link/3Gnkf9f

• FountainVest Partners is the last remaining suitor for ZF Friedrichshafen AG's airbags and seat belt business, per Bloomberg. axios.link/452xHss

• HKW acquired Sepratech Liquid Solutions, a Gonzales, La.-based industrial water and wastewater treatment service. axios.link/3IIVFjF

• Bain Capital and Kohlberg led an investment in PCI Pharma Services, a contract development and manufacturing organization. Mubadala Investment Company also invested. pci.com

⚡ Macquarie Asset Management shortlisted Brookfield Asset Management, Stonepeak and Air Liquide for the final bidding round for DIG Airgas, the South Korean industrial gas firm that could fetch up to $3.6b. axios.link/3IpdKmO

• MidOcean Energy, backed by EIG and Saudi Aramco, is the frontrunner to buy a minority stake in Petroliam Nasional Bhd.'s Canadian business, the Malaysian state energy firm, per Bloomberg. axios.link/44Pna2x

• Legendary, backed by Apollo, is weighing an acquisition of Lionsgate Studios (NYSE: LION), per Bloomberg. Lionsgate's market cap sits around $1.8b. axios.link/4kCQBe2

⚡ Partners Group's Infrastruture unit, GIC, TPG Rise Climate, and Mubadala Investment Company agreed to acquire Techem, a German provider of energy and building efficiency services, for €6.7b. Partners Group's Private Equity Division, La Caisse, and Ontario Teachers' are exiting. axios.link/3TDGqeg

🚑 Walgreens Boots Alliance shareholders (Nasdaq: WBA) have approved a plan for the company to be purchased by Sycamore Partners, in a deal valued at $23.7b. axios.link/40MFCaO

• White Peaks Capital invested in Pom+, a Swiss-based digital real estate management consultancy. axios.link/46zXI3y

• Summit Partners invested in Dreampath Diagnostics, a France-based anatomical pathology laboratory digitization company. dreampathdx.net

• Stone Point Capital, a private equity firm focused on financial services, closed Trident X with $11.5b, $2.5b larger than its last. stonepoint.com

🚀 Firefly Aerospace, a Cedar Park, Texas-based commercial space flight business, filed for an IPO. It posted revenue of $60.8m last year and a loss of $231.1m. AE Industrial Partners backs the firm. axios.link/4lO4eYK

• McGraw Hill, a Columbus, Ohio-based educational publisher owned by Platinum Equity, is looking to raise up to $537m in a sale of 24.39m shares priced between $19 and $22 apiece, valuing it at $4.2b. axios.link/4eWFATO

• NIQ Global Intelligence, a Chicago-based consumer shopping behavior company, plans to raise up to $1.2b in an offering of 50m shares priced between $20 to $24 apiece. Advent backs the firm. axios.link/3UgWt1H

• Trailblazer Acquisition, a SPAC focused on media, entertainment, and consumer retail, filed to raised $200m. Members of TCS Capital Management lead the firm. axios.link/4nFkoWp

• Zhipu, the Chinese OpenAI challenger backed by Alibaba, is considering shifting its IPO to Hong Kong over mainland China. axios.link/4eOnOC4

• Lloyd's Bank is in talks to acquire Curve, a London-based card consolidation startup backed by Breega, CreditEase, and SpeedInvest, for about £120m. It's raised over £200m. axios.link/4kDEyxg

• Meta has acquired Play AI, a Palo Alto, Calif.-based voice tech startup. Kindred Ventures, Race Capital, and Soma Capital back Play AI. axios.link/4kDfmXs

• Signicat acquired Inverid, a Dutch provider of NFC-based digital identity verification, from Main Capital. signicat.com

• Autodesk (NASDAQ:ADSK) is dropping its attempted acquisition of PTC (NASDAQ:PTC), a Boston-based software business, per Bloomberg. It would've been one of the largest deals this year, with PTC is valued at $23b. axios.link/4kIoavj

• Becton Dickinson's (NYSE: BDX) biosciences & diagnostic-solutions business agreed to combine with Waters, a Milford, Mass.-based lab instrument company, in a deal valued around $17.5b (NYSE: WAT). axios.link/4lv1pMH

• Kraft Heinz (Nasdaq: KHC) is looking to spin off a sizable piece of its grocery business, which could be worth as much as $20b. axios.link/4eOHPbF

• Skydance held early discussions about acquiring The Free Press, an alternative publication co-founded by Bari Weiss, per the NY Times. Allen & Company, Marc Andreessen and David Sacks back The Free Press. axios.link/3TxQSUH

• Huntington Bancshares (Nasdaq: HBAN) agreed to acquire Veritex Holdings, (Nasdaq: VBTX), a Dallas-based bank holding company with $13b in assets, for about $1.9b in stock. axios.link/4nS9WuI

• President Trump is ordering that Suirui International, a Hong Kong-based company, divest of its 2020 purchase of Jupiter Systems, the audiovisual equipment provider, in 120 days over national security concerns. axios.link/4lmao2p

• China gave Synopsys (Nasdaq: SNPS) conditional approval to buy Ansys (Nasdaq: ANSS), a Canonsburg, Pa.-based engineering design firm, for $35b. axios.link/3IkM2I3

• T-Mobile obtained FCC approval on its $4.4b UScellular deal and its Metronet acquisition after ending its DEI program. axios.link/3TCQHaE

• Evantic Capital, formed by former Sequoia Partner Matt Miller, is closing on a $400m European tech fund. axios.link/3IspiWv

• The University of Tokyo Edge Capital Partners (UTEC) closed its sixth fund with ¥47b ($326m). axios.link/40T1t0e

• Valante Capital, the private equity division of IDC Network, closed on $115m of $250m for its Ascend Fund II. axios.link/3ImEdl2

• Alberta Investment Management Corp. promoted Justin Lord to chief investment officer. He previously oversaw the company's equities and fixed income teams. axios.link/3UaR2Bu

• Rainier Partners promoted Henry Anderson and Luke Bench to principal and Dave Shephard to executive director. rainierpartners.com

Go deeper