Good morning! This week, Big Tech is playing musical chairs with entire startups, valuations have entered full fantasy mode, and even the most established VC firms are either fleeing Delaware or weathering Twitter storms.
As we continue to build at Context Ventures, we've launched Startup Intros with a simple mission: to help early-stage founders find the right investors, faster and smarter.
🎯 BLUF: Bottom Line Upfront
Talent Heist: Google pays $2.4B for Windsurf's brains to then quietly be bought out.
Space Madness: SpaceX seeks $400B valuation while investing $2B in Musk's xAI startup.
AI Bubble: Groq chases $6B valuation after landing massive $1.5B Saudi Arabia contract.
Unicorn Alert: LangChain reaches a $1.1B valuation, helping developers build better AI applications.
Corporate Exodus: A16z ditches Delaware for Nevada, citing biased tech courts.
Controversy Management: Sequoia stays silent as partner's inflammatory posts spark backlash.
🌪️ Windsurf Gets Caught in Big Tech's Perfect Storm
🏴☠️ Google Pulls a $2.4B Talent Heist, Leaves Windsurf in the Dust
Google just paid $2.4B to license Windsurf's AI coding tech and poach CEO Varun Mohan plus key engineers, after OpenAI's $3B buyout talks imploded over Microsoft drama:
Not a Real Acquisition: Google gets no ownership stake in Windsurf, just acquiring top talent and access to the tech.
The Winners: Investors, such as Kleiner Perkins and Green Oaks, walk away with solid returns, while vested employees cash out handsomely.
The Losers: The remaining 250 employees are left with $100M cash and get a new CEO to run what's left of the gutted company.
This "license-and-lift" strategy is becoming Big Tech's favorite move (e.g., Microsoft's Inflection grab or Google's Character.AI deal). It's faster than an actual acquisition and dodges regulatory scrutiny, but creates a toxic precedent where founders get rich while regular employees get left with worthless equity.
But wait, there’s more…
🚀 Cognition Picks Up the Pieces by Buying What's Left of Windsurf
Then, the company behind AI coding agent Devin, Cognition, quietly bought up whatever was left of Windsurf:
Bubble Territory: This Windsurf saga represents peak madness in AI coding, with the valuations being crazy high: Cursor is going at 20x revenue while Lovable is reportedly seeking 40x multiples.
Cautionary Tale: Companies that lose their founding teams in these reverse-acquihires typically don't fare well. Scale AI hemorrhaged customers after its Meta deal, and Inflection completely pivoted from consumer AI after Microsoft came in.
Cognition's move seems pretty clever. By acquiring Windsurf's assets, they're building a unified vision that combines autonomous coding agents with smart IDEs. It's positioning them as a serious threat to GitHub Copilot, Cursor, and others.
🚀 Elon's Space Empire Hits Warp Speed
💰 SpaceX Shoots for the Moon with $400B Valuation
SpaceX is reportedly in talks to raise fresh capital to achieve a whopping $400B valuation, up from $350B just six months ago. To put that in perspective, the company has nearly doubled its value since mid-2023 when it was "only" worth $210B. Here’s the math:
Share price is hitting around $212 per share in this new round
Deal includes both fresh funding and a tender offer for employees to cash out
SpaceX now dominates 84% of all space launches globally
Starlink accounts for two-thirds of all satellites currently orbiting Earth
Starlink is essentially printing money in space, while Starship represents humanity's best chance at becoming a multi-planetary species. If this deal closes, SpaceX becomes the most valuable private company, surpassing even OpenAI and ByteDance.
And SpaceX is getting involved in xAI…
🤖 The Musk Money Circle: SpaceX Drops $2B on xAI's $200B Dreams
SpaceX is backing xAI's latest fundraising round to the tune of $2B. Being xAI's third fundraising round in just two months, it is seeking a jaw-dropping $200B valuation. Here’s the math:
SpaceX's $2B represents nearly half of xAI's $5B round led by Morgan Stanley
xAI recently merged with X (formerly Twitter), creating an AI-social media hybrid
This follows Musk's classic playbook of using his companies to prop each other up
Musk has a history of shifting resources between his ventures, much like a corporate shell game. He moved Tesla and SpaceX employees to help fix Twitter, and Tesla shareholders once sued him for overpaying to acquire SolarCity (and he won that case).
⚡ Startup Quick Hits
🔥 Groq Wants $6B to Take on Nvidia: The AI chip startup is raising $300-500M at a $6B valuation (more than doubling from $2.8B) after landing a massive $1.5B contract with Saudi Arabia. They're expecting $500M in revenue this year from their inference chips that promise to make AI faster and cheaper than Nvidia's GPUs.
🦄 LangChain Hit Unicorn Status: The AI developer tools company raised $100M at a $1.1B valuation led by IVP. With clients like Uber and LinkedIn using their LangSmith platform, they're pulling in $12-16M annually, helping developers build better LLM applications.
🧮 Harmonic: Robinhood's Vlad Builds Math AI: The startup, with Robinhood's Vlad Tenev as Executive Chairman, raised a Series B at $875M valuation from Kleiner Perkins, Sequoia, and others. They're building "mathematical superintelligence" with their flagship model, Aristotle, which is launching this year to tackle complex math problems.
⚡ VC Quick Hits
🏃♂️ Andreessen Horowitz Ditches Delaware for Nevada: A16z is moving from Delaware to Nevada, citing the Delaware Court of Chancery's "unprecedented subjectivity" and bias against tech founders. The biggest VC firm in the country hopes their move signals to portfolio companies that Nevada's business-friendly courts are a viable alternative to Delaware's increasingly unpredictable judicial landscape.
🤐 Sequoia Bets on Silence Over Shaun Maguire Controversy: When partner Shaun Maguire called a NYC mayoral candidate an "Islamist" who "comes from a culture that lies," Sequoia chose radio silence over damage control. Despite 1,000+ petition signatures demanding action, the firm is banking on Maguire's deal flow (he led the $1.1B Bridge acquisition by Stripe) outweighing the backlash.
🤖 Solo GP Sarah Smith Raises $16M, Says AI Is Her Secret Weapon: The former Bain Capital Ventures investor closed her debut fund and claims AI lets her deliver "10x value in 1/10 of the time." She's targeting 50 companies, with an average check of $250K, focusing exclusively on the Stanford ecosystem, where she says 11% of unicorn founders have ties.
💸 In Other Funding News
Here's a roundup of notable recent funding rounds across various sectors:
🤖 AI & Machine Learning
General Reasoning: Raised $10.9M Round to develop futuristic AI agents to predict any environment and act in humanity's interests.
Loop Smart AI: Raised $400K Pre-Seed led by Mantra & Monday to develop enterprise AI agents for automating corporate activities and increasing productivity.
💼 Enterprise Software
⚙️ Infrastructure & Developer Tools
Foundation EGI: Raised $23M Series A led by RRE & Translink to accelerate all phases of the product development cycle.
Spacelift: Raised $51M Series C led by Five Elms to manage infrastructure provisioning, configuration, and governance workflows.
ZeroEntropy: Raised $4.2M Seed led by Initialized to provide search APIs for analyzing and retrieving unstructured data.
🧬 Biotech & Healthcare
Aqtual: Raised $31M Series B to provide healthcare solutions and diagnostics for chronic disease.
Renasant Bio: Raised $54.5M Seed led by 5AM to pioneer disease-modifying oral small molecule treatments.
Centivax: Raised $45M Series A led by Future to develop vaccines and therapeutic antibodies for infectious diseases.
Synfini: Raised $8.9M Round led by JSL Health to design improved molecules using AI, chemistry automation, and cloud tools.
📦 Supply Chain & Procurement
Firstshift: Raised $7.6M Round to automate supply chain design for the logistics sector.
Parspec: Raised $20M Series A led by Threshold to streamline B2B procurement in the construction supply chain.
🏠 Proptech & Real Estate
🚗 Mobility & Transportation
🚀 Aerospace & Space
Apolink: Raised $4.3M Seed to provide 24/7 satellite connectivity in low Earth orbit.
Akash Systems: Raised $2.8M Round to develop next-generation communications gear for space satellites.
🌟 Other
Formulate Robotics: Raised $1.4M Round to manufacture chemistry-based products for personal, pet, and home care.
OneText: Raised $4.5M Seed to provide text-based purchasing services for individuals and businesses.
RealSense: Raised $50M Series A led by Intel & MediaTek to develop 3D computer vision cameras and AI-powered perception technology.
WaHa: Raised $8M Series A led by Christian Thirion & Mike Phillips to improve HVAC energy efficiency by 50% through solid desiccant regeneration.
AirMDR: Raised $10.5M Seed led by Race Capital to provide AI-powered virtual security analysts for threat investigation and incident response.
Headlands Research: Raised $1.4M Round to improve the clinical trials process through integrated site organization.
Layer Financial Technologies: Raised $6.6M Seed led by Emergence Capital to help software companies launch embedded accounting for SMB customers.
Honor Education: Raised $38M Series A to provide e-learning-based education management services.
💸 New Venture Funds
OnePrime Capital raised $305M for its third secondary fund, targeting high-growth, late-stage software deals.
Boldstart Ventures raised $250M for its seventh fund focused on AI infrastructure, secure identity, permissionless coordination, and autonomous execution agents.
Propel Venture Partners raised $100M for its fifth fund focused on early-stage investments in the financial services ecosystem.
🤝 M&A Activity
CoreWeave is acquiring Core Scientific in a $9B all-stock deal for the data center operator with a large U.S. footprint and roots in crypto mining.
Meta acquired Play AI, a Palo Alto voice tech startup backed by Kindred Ventures, Race Capital & Soma Capital to integrate advanced voice features into future products.
Meta is taking a 3% stake in EssilorLuxottica for $3.5B as the two companies develop AI-powered smart glasses.
OpenAI completed its $6.5B purchase of io, a hardware startup founded by ex-Apple chief design officer Jony Ive.
Amplitude acquired Kraftful, an SF-based AI-native Voice of Customer startup.
Deal Roundup: 29 deals totaling $1.04B!
Please note that we're still working on building our data pipelines to identify pre-seed rounds as they come.
🌟 Editor's Note
At Startup Intros, our mission is to bring the latest founder-investor news straight to your inbox, keeping you ahead in the fast-paced world of Silicon Valley. Our free weekly newsletter delivers curated insights, deals, and trends to help you navigate the startup ecosystem.
Stay tuned for our upcoming paid daily newsletter, packed with deeper dives, plus weekly spotlights on top VCs, investors, and founders, and practical tips for raising your next round.
💭 Closing Thoughts
Between "reverse acqui-hires" that leave employees stranded and AI startups commanding 40x revenue multiples, it is never a dull week in the valley. It's going to be one hell of a ride, so just make sure you're holding vested equity when the music stops.
Till next time,
Dev Chandra
CEO @ Startup Intros
Associate @ Context VC
LinkedIn: /in/devchandra
Tim Hsia
Investor @ Context VC
Co-Founder @ Startup Intros
LinkedIn: /in/timhsia
P.S. Raised this week, and we missed you? Want to be featured? Have tips or funding questions? Reply or DM us as we’re here to help.
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