The U.S. Small Business Administration today will open up billions of loan dollars to venture capital funds, via the implementation of a new rule, it tells Axios exclusively.

The big picture: This is a modernization of the Small Business Investment Company (SBIC) program, which is aimed at increasing investment in U.S. small businesses.

• Particularly for businesses in underserved communities and geographies, plus for capital intensive industries and those critical for national security.

Background: The SBIC program has historically provided debentures that require participating funds to pay semi-annual interest.

• Such a structure hasn't really worked well for longer-duration investments VC funds, including funds-of-funds. Instead, it's mostly been used by mezzanine debt and other private credit funds, plus some investment vehicles that are eligible for Community Reinvestment Act credits.
• There also was a non-debt product called the participating securities program, but that was shut down in 2014 — in part because of concerns that it could be gamed in a way to make the government effectively subordinate to GPs and LPs.

Flash forward: The new option being announced today features debentures on which interest accrues over the life of the fund, in order to better align with cashflows of MOIC-driven strategies.

• Interest can be prepaid, if desired, and must be paid on a pro rata basis when there are LP distributions. Return recycling is permitted.
• Participating funds must invest exclusively in U.S. small businesses, or funds that make such investments, as defined by the SBA's fairly generous metrics.

What they're saying: "The headlines about record venture capital investment miss that tons of that money is going into things like B2B SaaS, instead of to hard technologies and critical technologies that are vital to our global competitiveness and national security," says Bailey DeVries, the SBA's associate administrator and head of its Office of Investment and Innovation.

• "The SBIC program provides a loan to the fund, without the SBA having any profit participation, which has the potential to shift the risk-adjusted return profile so that funds can allocate to parts of the market that they may view as riskier or more volatile."

By the numbers: DeVries says that the SBA could have up to $6.9 billion in available SBIC loans for fiscal 2024, based on President Biden's budget proposal. This year's authorization is $5 billion.

• In fiscal 2021 the program maxed out its $4 billion authorization, while in fiscal 2022 it only disbursed $3.8 billion of its $5 billion authorization.
• DeVries says that the re-up rate from existing funds is generally in the 67%-72% range.

The bottom line: The federal spigot is now open. Given LP reticence to make new VC fund commitments, don't be surprised if the SBA gets a flood of applications.

Hawaiian Electric (NYSE: HE) is in talks with restructuring firms, as it faces financial and legal challenges from the Maui wildfires, per the WSJ.

Why it's the BFD: This reflects how power companies and electrical grid operators are at increasing risk of financial calamity due to natural disasters they're accused of either causing or worsening, Axios' Nathan Bomey writes.

Investor reax: Hawaiian Electric shares are down 59% over the past week, and off another 21% in pre-market trades on Thursday. Its bonds are also in freefall, with S&P cutting its credit rating to junk.

Flashback: California utility giant PG&E was forced to file for Chapter 11 bankruptcy protection after wildfires in 2017 and 2018. During that process, a judge sided with fire victims over the company's claims of liability protections.

The bottom line: Over 1,000 people remain missing in Maui, where the official death toll from the fires has reached 110 people.

🚑 Abcuro, a Newton, Mass.-based developer of anti-KLRG1 treatments for autoimmune diseases and cancer, raised $155m in Series B funding. Redmile Group and Bain Capital Life Sciences co-led, and were joined by RA Capital Management, Samsara BioCapital, Sanofi Ventures, New Leaf Ventures, Pontifax, Tekla Capital Management BlackRock, Mass General Brigham Ventures, Eurofarma and Soleus Capital. https://axios.link/3skT732

• BitGo, a Sioux Falls, S.D.-based crypto custody startup, raised $100m in Series C funding at a $1.75b valuation. No backers were disclosed, but existing investors include Goldman Sachs, Craft Ventures, DRW, Galaxy Digital Ventures, Redpoint Ventures and Valor Equity Partners. https://axios.link/3OF4iLp

• Aether, an SF-based developer of rare metal extraction tech, raised $49m in Series A funding co-led by Natural Capital and Unless. www.aetherbio.com

⚡ Rondo Energy, an Alameda, Calif.-based energy storage developer for industrial heat and power, raised $60m from Breakthrough Energy Ventures, Energy Impact Partners, SCG, Titan, Microsoft's Climate Innovation Fund, Rio Tinto, SABIC, Aramco Ventures, SDCL Energy Efficiency Income Trust and John Doerr. https://axios.link/3qygaai

⚡ Mitra Chem, a Mountain View, Calif.-based supplier of iron-based cathode materials for batteries, held a $40m first close on a $60m Series B round led by General Motors. https://axios.link/44dv2IE

🚑 Mendaera, a San Mateo, Calif.-based health care robotics startup, raised $24m in Series A funding. Lux Capital led, and was joined by Founders Fund, Operator Partners, Allen & Co., Fred Moll and former Sen. Bob Kerrey. www.mendaera.com

• Caden, a New York-based personal data monetization app, raised $15m in Series A funding. Nava Ventures led, and was joined by AME Cloud Ventures, Streamlined Ventures, Montage Ventures, Industry Ventures, 1707 Capital and AAF Management. https://axios.link/44c3Ji0

⚡ Sapphire Technologies, a Cerritos, Calif.-based maker of turboexpanders, raised $10m in Series B funding. Energy Capital Ventures led, and was joined by Marathon Petroleum, Chevron Technology Ventures, Equinor Ventures and Cooper & Co. https://axios.link/3KGDMAl

• The Contract Network, an Atlanta-based collaborative contracting platform, raised $8m in seed funding led by Tusk Venture Partners. www.thecontractnetwork.com

🚑 Venteur, a Berkeley, Calif.-based marketplace for personalized employee health plans, raised $7.6m in seed funding, per Axios Pro. GSR led, and was joined by Headwater VC, Revelry Venture Partners, Houghton Street Ventures, Plug and Play, Techstars and CRCM Ventures. https://axios.link/3OZt8qL

• Dinari, an SF-based startup tokenizing real-world assets, raised $7.5m in seed funding from SPEILLLP, 500 Global, Third Kind Venture Capital, Sancus Ventures, Version One VC and Balaji Srinivasan. https://axios.link/3KGRqDw

• D'Amelio Brands, a company founded by TikTok stars Charli and Dixie D'Amelio and their parents, raised $5m from Fifth Growth Fund, per Axios. https://axios.link/44evir7

• Neo Group, an Indian asset management and financial advisory, is raising $50m from Peak XV Partners, per TechCrunch. https://axios.link/45x9F6g

⚡ American Electric Power (Nasdaq: AEP), a Columbus, Ohio-based utility, completed its $1.5b sale of its unregulated renewables portfolio to a group consisting of Invenergy, CDPQ and Blackstone Infrastructure. www.aep.com

• Arcadea Group acquired a majority stake in Flight Vector, a Henderson, Nev.-based provider of flight dispatch software. www.flightvector.com

🚑 Coalesce Capital and Freedom 3 Capital recapitalized Examinetics, an Overland Park, Kan.-based provider of occupational health compliance testing. www.examinetics.com

• Inbenta, a Sunnyvale, Calif.-based portfolio company of Tritium Partners, acquired Horizn, a Canadian interactive product demo company focused on financial services. www.inbenta.com

• Navacord, a Toronto-based commercial brokerage owned by Madison Dearborn Partners, agreed to buy Condominium Insurance Solutions. https://axios.link/47xGCRT

• Ocuco, an Irish provider of cloud software for eyecare, raised 60m from Accel-KKR. www.ocuco.com

• Param, a Turkish fintech, acquired Czech BNPL provider Twisto from Zip Co. (AXX: ZIP). Param backers include ERBD, CEECAT, Alpha Associates and RevoCapital. www.param.com.tr

• Splitit (ASX: SPT), an Atlanta-based BNPL provider, agreed to go private via a $60m investment from Motive Partners, Thorney Investment Group and Parea Capital. https://axios.link/3E0pwi0

• Sustana Fiber, a De Pere, Wis.-based paper maker backed by Blackstone, agreed to buy Toronto-based Hanna Paper. https://axios.link/3OZzBC1

🌎 TPG Rise Climate agreed to buy A-Gas, a British refrigerant gases supplier and lifecycle management firm, from KKR (which will retain a minority stake). www.agas.com

• Samsonite, the Hong Kong-listed luggage maker with a US$4.5b market cap, is considering a second listing in the U.S., per Bloomberg. https://axios.link/45uaz3u

• Horizon Aircraft, a Canadian eVTOL developer, agreed to go public at an implied $96m valuation via Pono Capital Three (Nasdaq: PTHRU). https://axios.link/458L0oN

• Protoniq Acquisition, an APAC-focused SPAC led by Babar Ali (ex-NewQuantum Holdings), withdrew plans for a $100m IPO. https://axios.link/3QLTtdh

• VinFast, a Vietnamese electric vehicle maker, began trading on the Nasdaq (Nasdaq: VFS) after going public at an implied $27b valuation via Black Spade Acquisition Co. https://axios.link/3sfgF9H

• ArcelorMittal (NYSE: MT) is the next possible suitor for U.S. Steel (NYSE: X), per Reuters. https://axios.link/3P3oxUQ

• BAE Systems (LSE: BAES) agreed to buy the aerospace assets of Colorado-based Ball Corp. (NYSE: BALL) for around $5.55b in cash. https://axios.link/45ubmS7

🚑 Cano Health (NYSE: CANO), a Miami-based primary care company whose market cap has fallen below $130m, hired JPMorgan and Oppenheimer to explore strategic alternatives, including a possible sale. https://axios.link/3sc8fzY

• GQG Partners acquired an 8.1% stake in listed Indian utility Adani Power for $1.1b, per Reuters. https://axios.link/3OG7qqp

• OpenAI acquired Global Illumination, a VC-backed startup that uses AI to build digital experiences. It's OpenAI's first acquisition in its seven-year history. https://axios.link/3QEskJn

• Paramount Global (Nasdaq: PARA) ended plans to sell its majority stake in BET Media Group, which includes cable networks BET and VH1, as first reported by the WSJ and confirmed by Axios Pro.

🌎 Charlie Gailliot joined KKR as global co-head of climate investments. He previously spent 20 years at Goldman Sachs, most recently leading its energy transition and diversified industrials teams. www.kkr.com

Marc Becker, co-head of impact investing at Apollo Global Management, has died at the age of 51 from pancreatic cancer.

• Marc joined Apollo 27 years ago as its 14th employee, and took on the impact role in 2020. He also served as a member of its private equity investment committee, chaired the investment committees for U.S. and Asia real estate private equity, and was chair of portfolio company ADT Corp.
• Past board seats included Sun Country Airlines, Realogy and Pacer International.
• His obituary refers to Marc as a "warrior mensch," and says he is survived by wife, Caryn, and three children.
• In an internal letter to colleagues, Apollo senior leadership wrote: "We have lost a larger-than-life presence who made an indelible mark on Apollo. Marc's legacy can be seen in everyone who he touched as a colleague, mentor, and friend. We will remember him as a dedicated and loyal class-act, who was gracious and generous to all."

Rest in peace, Marc.

Secretaries of state from seven U.S. states yesterday sent a letter to FTC chair Lina Khan, asking her to block Kroger's proposed $24.6 billion takeover of rival supermarket operator Albertsons.

• They wrote that consolidation is "draining Americans of their hard-earned wages and livelihoods."
• All seven are Democrats, representing Arizona, Colorado, Minnesota, New Maine, Mexico, Rhode Island and Vermont.

Elsewhere in grocery: Aldi US has agreed to buy Southeastern Grocers, the Jacksonville, Fla.-based owner of the Winn-Dixie and Harveys grocery chains.

• In a related transaction, Southeastern will sell 28-store chain Fresco y Más to another buyer.