Are you a fund manager seeking capital from a public pension system, and wish you could donate to an elected official with influence over that system?

• Don't worry, the Trump administration has your back.

Driving the news: The SEC last week proposed rescinding Rule 206(4)-5 of the Investment Advisers Act, which was adopted in 2010 after a raft of pay-to-play schemes in states like New York and Connecticut.

• The agency claims that the rule stifles "free speech" and had too many unintended consequences.
• It did not propose any sort of replacement, instead arguing that existing state and local laws would suffice — even though it was the failure of those very laws that led to the rule's creation in the first place.

Zoom in: Rule 206(4)-5 prohibits "covered associates" from providing advisory services to a government client for two years after contributing to certain candidates and/or elected officials (federal candidates are generally exempted, unless they hold relevant state office). Other sorts of gifts are also prohibited.

• "Covered associates" is a fairly broad term, and includes a lookback provision for new hires. There also are anti-circumvention clauses that apply to placement agents.

The big picture: The rule is very broad, but intentionally so.

• State and local prosecutors often had difficulties proving quid pro quo, and believed the federal ban was the best way to stop slippery actors.
• The SEC agreed on a bipartisan basis, voting unanimously in support.

Fast forward: The SEC now argues that compliance has been unwieldy, and prevented public pensions from accessing "the most qualified or cost-effective advisers."

• Maybe it was true in the early days, but by now every fund manager — and certainly their lawyers — know about the rule and the importance of sharing it with colleagues. To date there have been fewer than two dozen related charges by the SEC.
• Yes, some of those violations feel, in the SEC's new language, more like "foot faults" than intentional grift. But, again, the agency isn't talking about tweaking the rule; it's talking about eliminating it altogether, and just hoping that there isn't a resurgence of bribery in the pursuit of taxpayer dollars.

State of play: The rescission proposal is supported by SEC chair Paul Atkins, and the SEC's two current commissioners — both Republicans, as Trump hasn't bothered to fill the two Democratic spots, creating something of an echo chamber.

• The SEC will accept comments for the next two months.

Split Pay, a lending startup initially focused on renters, tells Axios that it's raised $125 million in Series A and Series B funding. Khosla Ventures led both rounds, joined by Thrive Capital and Max Levchin.

Why it's the BFD: It's an effort to make the consumer economy work more like the invoice-based business economy — which recognizes that income can be lumpy — by reconciling the timing discrepancy between large bills (once per month) and paychecks (twice per month).

• It's also a BNPL-style bet that AI can be used to expand underwriting without also expanding losses.

How it works: Split Pay lets renters pay their entire bill on the due date, but floats up to 50% for up to 30 days.

• It charges 2% of the entire bill, plus a $10 monthly "subscription" fee, but doesn't charge late fees or interest. If someone ultimately doesn't pay, they no longer can use the service.
• Split Pay also can be used for other types of large expenses, including student loans and car payments, and claims to have around one million members (with a quarter of them using it monthly). It also soon will launch a credit card with Visa, featuring a low APR and no rewards program.

Deal breakdown: Split Pay initially raised $15 million in seed funding in 2023, before scoring $25 million for its Series A round last fall and then around $100 million for the Series B (which might still grow a bit).

The bottom line: "We believe that AI is going to blow up underwriting, so we spent our first two years like a lab building a new foundation model focused on people under 40," says co-founder and CEO Andrew Borovsky, a former Block/Cash App executive.

• "What we found was that our average consumer had $90,000 of income and generated around $2,100 in cashflow, but was still struggling and living paycheck-to-paycheck. The biggest reason was the timing of bills."

• Mistral, a French AI lab, raised €3b in Series D funding at a post-money valuation north of €21b. Samsung led, joined by Scaleup Europe Fund, EQT, PSG Equity, Advent, BlackRock, the Grand Duchy of Luxembourg and insiders a16z, ASML, Belfius, BNP Paribas CIB, Bpifrance, Carmignac, DST Global, Eurazeo, General Catalyst, Headline, Hillspire, Index Ventures, Korelya Capital, Lightspeed, Nvidia, Phoenix Court's Solar fund, and Salesforce Ventures. axios.link/3SXMHVp

🚀 Stoke Space, a Kent, Wash., maker of reusable rockets, raised $1b in Series E funding. Point72 Ventures and Spark Capital led, joined by General Innovation, Glade Brook Capital, US Innovation Technology, Washington Harbour Partners, Woven Capital and YC. axios.link/4xgInyK

🚀 The Exploration Co., a French developer of reusable cargo spacecraft, raised $450m in Series C funding led by Bessemer Venture Partners, Atomico, and Scaleup Europe Fund. axios.link/4qWcs4R

🚑 Forus (fka Tandem), an AI platform for doctors' offices, raised $150m in Series C funding at a $3b valuation. Bain Capital Ventures led, joined by insiders Thrive Capital, General Catalyst, Accel, Redpoint, BoxGroup, and Pear VC. axios.link/4d0Zi0M

🚑 BrainChild Bio, a developer of CAR T-cell therapies to treat pediatric brain tumors, raised $116m in Series A funding led by an undisclosed private family fund and foundation. Other backers include WRF Capital and Seattle Children's. axios.link/3UFIVk2

🚀 Pixxel, an Indian hyperspectral imaging startup, raised $100m in Series C funding. Temasek and Seraphim led, joined by Radical Ventures, GrowX Ventures, 360 ONE Asset and IMM Investment. axios.link/4xKWwVU

🚑 Moonwalk Biosciences, a developer of RNAi medicines for obesity and cardiometabolic diseases, raised $70m in Series B funding. Alpha Wave and YK Bioventures led, joined by Eli Lilly, Gaorong Ventures and insiders Arch Venture Partners, Khosla Ventures, and Future Ventures. axios.link/4ynQtX9

• Poseidon Aerospace, an SF-based developer of cargo-hauling unmanned aircraft, raised $60m in Series A funding. TQ Ventures led, joined by Hanwha Asset Management, G Squared, JAWS. Starship Ventures, Draper Associates, and Drover Ventures. axios.link/4ypeLzZ

⚡ Bluecore Energy, a developer of small nuclear reactors on barges that could power ports, raised $50m in seed funding led by Silverton Partners. axios.link/4gJ7W6o

• ARC Ride, a Kenyan electric mobility startup, raised $33.3m. Norrsken22 and Novastar Ventures led, joined by IFC, British International Investment, Proparco, Musashi Seimitsu, and Talanton. axios.link/3Tew2gp

• Blee, an NYC-based provider of marketing compliance software, raised $27m in seed and Series A funding, per Axios Pro. Backers include Fin Capital, SMBC, Hannah Grey VC, National Bank of Canada, YC, Penny Jar Capital, Cardumen Capital, and Treasury. axios.link/4xHmnxV

🚑 EZ Health, a senior-care startup, raised $26m in pre-seed and seed funding from backers like Primary Ventures and Construct Capital, per Axios Pro. axios.link/3UE0Bwo

• AI Score, a London-based AI governance platform, raised $5.4m in seed funding led by Fuel Ventures. axios.link/469SxpO

• Fluencify, a Swedish creator marketing platform, raised $4.3m in pre-seed funding. ByFounders led, joined by Wave Ventures. axios.link/4hcbQ7Y

⚡ Veridue, a London-based due diligence platform for energy infrastructure projects, raised $4m in pre-seed funding. Episode 1 Ventures led, joined by HTGF and Pi Labs. axios.link/3UGsC6z

• Tickets for Good, a U.K. ticketing platform, raised £3.9m from NPIF II – Mercia Equity Finance, S13, Finance Yorkshire, and Leansquare. axios.link/4iAP9f5

• Outline, an agentic platform for corporate financial planning, raised $3m led by Founders Future. axios.link/46csPAY

• VC Trade, a German lending fintech, raised funding from UniCredit. axios.link/4xaeJe8

• EverBank Financial agreed to a reverse merger with WaFd (Nasdaq: WAFD), thus creating a bank with around $75b in assets. Jacksonville, Fla.-based EverBank was acquired in 2023 by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street, and Bayview Asset Management. axios.link/3V1Gb0l

• Altaline invested in Brazos Safety Systems, a Fort Worth, Texas-based provider of flight safety tech solutions. axios.link/4cwUvEf

• Apollo agreed to buy $500m of convertible preferred shares in Cumberland Farms, a TDR Capital-owned convenience store chain that recently filed for an IPO. axios.link/4AiptKD

• Blackstone is among those weighing a bid for IIFL Finance, an Indian shadow lender owned by Fairfax Financial (NYSE: FFH), per Bloomberg. axios.link/4gHDmtS

• ICG agreed to acquire Westerleigh Group, a British operator of crematoria and cemeteries, from Ontario Teachers' Pension Plan and Universities Superannuation Scheme. axios.link/4ihTAew

• Ingenia Communities (ASX: INA), an Australian operator of retirement communities and holiday parks, rejected an A$1.94b buyout offer from Warburg Pincus. axios.link/4gOehfz

• Main Capital Partners acquired Orgvue, a London-based provider of workforce management software. axios.link/4r2sSsC

• One Equity Partners invested in Metro East Industries, an Alorton, Ill.-based provider of train maintenance and repair services. axios.link/4xblGvI

• Renaissance Partners agreed to acquire De Wave Group, an Italian maker of yacht and cruise ship interiors, from Platinum Equity. axios.link/4heFRE6

• Soho Square Capital invested in Strathberry, the Scottish luxury leather goods brand. axios.link/4qXnIhk

• T1A, a Danish portfolio company of Eurazeo, acquired sustainable hardware solutions firm Flex IT from Altor Equity. axios.link/4gTX4kS

🚑 Toscafund Asset Management agreed to buy U.K. private hospital group Spire Healthcare (LSE: SPI) for around £1.03b. axios.link/4yqahJx

No U.S. IPOs are expected this week. We had anticipated an S-1 from Anthropic, but Reuters suggests it might be pushed into October.

🚑 ADARx Pharmaceuticals, a San Diego-based developer of siRNA therapies, filed for an IPO. The Phase 3 company plans to list on the Nasdaq (ADRX) and has raised around $350m from firms like OrbiMed (30.8% pre-IPO stake), Lilly Asia Ventures (15.7%), SR One (11.1%), and Bain Capital Life Sciences (6.8%). axios.link/3UtDQvb

• Blue Owl Capital plans to form and take public a data center REIT, seeded with $6.5b of its own data center assets, per Bloomberg. axios.link/3TffAwo

⚡ Holtec International, a Jupiter, Fla.-based nuclear power engineering company, set IPO terms to 50m shares at $15-$18. It would have a $9.35b market cap, were it to price in the middle, and plans to list on the Nasdaq (HNUC). axios.link/4iRBRuz

• Legion Capital Acquisition, an aerospace and defense-tech SPAC, filed for a $200m IPO. axios.link/4h0XaHM

• New Iceland Arctic Acquisition, an Iceland-focused SPAC, filed for a $125m IPO. axios.link/4ygKyTM

• Anthropic has walked away from a possible $6b takeover of Decart, a developer of world models and chip optimization software, per Bloomberg. Decart has raised over $450m in VC funding, most recently in May at a $4b valuation from Radical Ventures, Benchmark, Sequoia Capital, Aleph VC, and Zeev Ventures. BFD flashback

⚡ Citadel is seeking to buy U.S. shale production assets, per Reuters. It also put in a bid for WildFire Energy earlier this year, but got beaten out. axios.link/3UGBgBZ

• Franklin Templeton (NYSE: BEN) agreed to buy a majority stake in Stoneshield Capital, a Madrid-based real estate and infrastructure investment firm. axios.link/4gVgrdk

⚡ Tamarack Valley Energy (TSX: TVE) agreed to buy Canadian oil sands peer Headwater Exploration (TSX: HWK) for C$10b. axios.link/4ykDHZl

• Volkswagen is weighing a sale of Italian motorcycle maker Ducati. axios.link/4xDxub2

• Bridgepoint Credit raised a €1.2b continuation vehicle for its second direct lending fund, raised in 2017, led by Pantheon Ventures. axios.link/4gI4eKf

• Cinven raised €2.3b for its second European midmarket fund. axios.link/46K3NsZ

🌎 Clean Growth Fund, a U.K. clean-tech firm, held an £81.5m second close on its second fund, which is targeting a total of £150m. axios.link/4iX4YfU

• Molten Ventures of London held a £175m first close on a "scaleup" fund that's targeting £350m. axios.link/4xmKvVK

• Sound Ventures is raising its first funds without Ashton Kutcher as a general partner, per SEC filings. soundventures.com

• The U.K. government launched a £150m fund for university spinouts in the north of England. axios.link/4qW8OrX

🚑 David Blais is leaving Guggenheim Securities to join JPMorgan as a managing director of health-care investment banking, per Reuters. axios.link/4he7NYP

• FPE Capital promoted Ben Cole to partner. axios.link/4ytEQhx

• Alex Kurland joined Menlo Ventures as a partner. He previously was with Meritech. axios.link/4A67Eyc

• Gauravjit Singh joined India's National Investment and Infrastructure Fund as managing partner and global head of capital formation. He previously was with PAG. axios.link/4gGuMM5

GE is back in the mega-takeover game, this morning agreeing to buy Consolidated Precision Products for $11.75 billion from Warburg Pincus and Berkshire Partners.

• This is CEO Larry Culp's largest acquisition in his eight years at the helm.
• Cleveland-based CPP is a major supplier of airfoil castings, a critical component in airplane engines at a time when airplane engines are in high demand.