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Good morning loyal Term Sheet readers, this is energy editor, Jordan Blum, filling in for Allie. The Middle East remains in a state of chaotic conflict, and fuel and oil prices are still sky high.<\/p>\n
All these geopolitical variables put a partial freeze on energy dealmaking\u2014potential sellers ask for more money on inflated valuations, while the buyers think longer term and conservatively. It\u2019s hard to meet in the middle on a price tag.<\/p>\n
The main exception though is in the so-called midstream sector, essentially the pipelines and gathering and processing systems that move the oil and gas from the wellheads to the refineries, power plants, or liquefied natural gas (LNG) export hubs.<\/p>\n
\u201cMidstream has been pretty busy,\u201d said Andrew Dittmar, principal analyst at \u200bEnverus Intelligence Research. \u201cThere\u2019s just such a demand for infrastructure right now, particularly on the [natural] gas side, as we sort of reshape the U.S. gas market with LNG demand coming online on the Gulf Coast and data center demand increasing.\u201d<\/p>\n
That upswing in pipeline plays received a potential boost Wednesday with the Senate introduction of a bipartisan, infrastructure permitting reform bill that could gain legislative momentum before the end of the year. Such a law would benefit all-of-the-above energy to benefit the AI boom. That would mean expediting oil and gas pipelines and projects, but also the wind, solar, and electric transmission projects that have faced opposition within the Trump administration.<\/p>\n
And that could further speed up dealmaking. Recently, Tulsa-based ONEOK bought West Texas\u2019s Brazos Midstream\u2019s Permian Basin assets for $4.42 billion. This comes shortly after pipeline giant Williams acquired Momentum Midstream and its Texas and Louisiana pipeline gathering and processing facilities for $5.5 billion. And Western Midstream paid $1.6 billion for Brazos\u2019s Delaware Basin facilities in the western lobe of the Permian.<\/p>\n
These deals essentially all involve private equity firms selling high to public companies looking to build scale. \u201cI think the market does favor larger, integrated midstream systems, and we\u2019re going to continue to see some of the smaller players, particularly on the private side, rolled up amid a considerable acquisition appetite from the large companies,\u201d Dittmar said. On the oil side, pipeline giant Enbridge just bought Tallgrass Energy\u2019s crude assets for $2.55 billion, and Plains All American Pipeline paid $585 million for Silver Creek Midstream in Wyoming.<\/p>\n
As for the oil and gas production side of the business\u2014the upstream sector\u2014there hasn\u2019t been a massive deal since early February when Devon Energy paid $26.5 billion for Coterra Energy. That notably came weeks before the onset of the Iran war.<\/p>\n
The biggest upstream deal since is Magnolia Oil & Gas paying $4 billion for Warburg Pincus\u2019 and Kayne Anderson WildFire Energy in South Texas\u2019 Eagle Ford Shale. None of those companies are exactly household names.<\/p>\n
Now, Devon is trying to sell its own Eagle Ford assets to help cut down on the debt it assumed from the Coterra deal. BP was closely eyeing those assets but reportedly backed off. Dittmar said it\u2019s notable BP is even looking to expand in U.S. shale.<\/p>\n
\u201cIf you have a global major looking at U.S. onshore assets, it continues to speak to how competitive and attractive the opportunities are here, even as we talk about inventory scarcity,\u201d he said.<\/p>\n
Major U.S. companies are looking to explore internationally again\u2014as the U.S. shale business matures\u2014while more international players are willing to pay a premium for U.S. assets to ensure long-term supplies, especially for LNG. \u201cIt\u2019s interesting that we talk about international capital coming to the U.S. at the same time that U.S. capital is looking to go abroad,\u201d Dittmar added.<\/p>\n
Jordan Blum<\/strong> Submit a deal for the Term Sheet newsletter here.<\/p>\n Joey Abrams curated the deals section of today\u2019s newsletter<\/em>.<\/em> Subscribe here.<\/p>\n – <\/span>GMI<\/b> Cloud<\/b>, a Mountain View, Calif.-based cloud-computing provider offering GPU infrastructure for AI workloads, raised $223 million in Series B funding. <\/span>ARCHIV<\/b> led the round and was joined by <\/span>NVIDIA<\/b>.<\/span><\/p>\n – <\/span>CScale<\/b>, a Palo Alto, Calif.-based developer of optical interconnect technology for AI data centers, raised $145 million in Series C funding. <\/span>Atreides<\/b> Management<\/b>, <\/span>Valor<\/b> Equity<\/b> Partners<\/b>, and <\/span>Premji<\/b> Invest<\/b> led the round.<\/span><\/p>\n – <\/span>Hertha<\/b> Metals<\/b>, a Conroe, Texas-based producer of high-purity iron and steel for rare-earth magnets, raised $133.7 million in Series A funding. <\/span>Khosla<\/b> Ventures<\/b> and <\/span>Doerr<\/b> Capital<\/b> led the round and were joined by <\/span>Gates<\/b> Frontier<\/b>, <\/span>Toyota<\/b> Ventures<\/b>, and <\/span>Siemens<\/b> Financial<\/b> Services<\/b>.<\/span><\/p>\n – <\/span>Flow<\/b> Engineering<\/b>, a San Francisco-based software platform that helps hardware teams manage requirements, design changes, and testing, raised $50 million in Series B funding. <\/span>Antonio<\/b> Gracias<\/b> and <\/span>Gavin<\/b> Baker<\/b> led the round and were joined by <\/span>Human<\/b> Capital<\/b>, <\/span>Evantic<\/b>, <\/span>SV<\/b> Angel<\/b>, <\/span>Odyssey<\/b>, <\/span>EQ<\/b>, and others.<\/span><\/p>\n –<\/span> Miter<\/b>, a San Francisco-based AI-powered workforce-management platform for construction companies, raised $40 million in Series B funding. <\/span>Battery<\/b> Ventures<\/b> led the round and was joined by <\/span>Bessemer<\/b> Venture<\/b> Partners<\/b> and <\/span>Coatue<\/b>.<\/span><\/p>\n – <\/span>Relay<\/b>, a Raleigh, N.C.-based communications and workflow platform for frontline workers, raised $36 million in funding. <\/span>International<\/b> Paper<\/b> led the round.<\/span><\/p>\n – <\/span>Inbolt<\/b>, a Paris, France-based developer of AI-powered 3D-vision software for industrial robots, raised $12.5 million in funding. <\/span>Shift4Good<\/b> led the round and was joined by <\/span>Bridges<\/b> Climate<\/b> Transition<\/b> Partners<\/b> and others.<\/span><\/p>\n – <\/span>Rig<\/b> Security<\/b>, a Tel Aviv, Israel-based cybersecurity platform that monitors and controls AI agents\u2019 access to corporate systems, raised $12 million in seed funding. <\/span>Ten<\/b> Eleven<\/b> Ventures<\/b> and <\/span>Brightmind<\/b> Partners<\/b> led the round and were joined by <\/span>CrowdStrike<\/b> Falcon<\/b> Fund<\/b>.<\/span><\/p>\n – <\/span>Kanu<\/b> AI<\/b>, a Seattle, Wash.-based AI platform that turns employee workflows into custom business software, raised $11.7 million in funding. <\/span>Trilogy Equity<\/b> Partners<\/b> led the round and was joined by <\/span>a16z<\/b> speedrun<\/b>, <\/span>BMW i Ventures<\/b>, and <\/span>Accel<\/b>.<\/span><\/p>\n – <\/span>Hop<\/b> Aero<\/b>, an Orange, Calif.-based developer of autonomous hypersonic cargo rockets for military logistics, raised $11 million in funding. <\/span>Initialized<\/b> Capital<\/b> led the round and was joined by<\/span> Y<\/b> Combinator<\/b>, <\/span>Lunar<\/b> Ventures<\/b>, <\/span>System.One<\/b>, and <\/span>Outsized<\/b> Ventures<\/b>.\u00a0<\/span><\/p>\n – <\/span>Osavul<\/b>, a Luxembourg-based cyber-threat intelligence company, raised \u20ac8.5 million ($10 million) in Series A funding. <\/span>33N<\/b> Ventures<\/b> led the round and was joined by <\/span>Balnord<\/b>, <\/span>G+D Ventures<\/b>, and existing investor <\/span>42CAP<\/b>.<\/span><\/p>\n – <\/span>Beltic<\/b>, a San Francisco-based agent verification infrastructure company, raised $8.8 across seed and pre-seed rounds. <\/span>Norwest<\/b> led the seed round and was joined by <\/span>Restive<\/b> Ventures<\/b>, <\/span>Oxford<\/b> Seed<\/b> Fund<\/b>, and <\/span>Collide<\/b> Capital<\/b>.<\/span><\/p>\n – <\/span>Destro<\/b> AI<\/b>, a Brooklyn, N.Y.-based AI software provider for warehouse robots, raised $8 million in seed funding. <\/span>Base10<\/b> Partners<\/b> and <\/span>Bonfire<\/b> Ventures<\/b> led the round and were joined by <\/span>CoFound<\/b> Partners<\/b>.\u00a0<\/span><\/p>\n – <\/span>Quotr<\/b>, a San Francisco-based AI-powered construction estimating and procurement platform, raised $4 million in seed funding. <\/span>Llama<\/b> Ventures<\/b> led the round and was joined by angel investors.<\/span><\/p>\n – <\/span>Nuveen<\/b> acquired <\/span>Schroders<\/b>, a London, U.K.-based asset manager, for \u00a39.9 billion ($13.3 billion).<\/span><\/p>\n – <\/span>Aspirity<\/b> Partners<\/b> agreed to acquire a majority stake in <\/span>Onomondo<\/b>, a Copenhagen, Denmark-based provider of cellular connectivity for internet-connected devices, in a combined investment worth more than \u20ac100 million ($113 million).<\/span><\/p>\n – <\/span>Sovos<\/b>, backed by <\/span>Hg<\/b>, acquired <\/span>Flowie<\/b>, a Paris, France-based AI-powered platform for finance workflows, and <\/span>Blue<\/b> dot<\/b>, a Tel Aviv, Israel-based platform that helps companies identify and recover VAT overpayments. Financial terms were not disclosed.\u00a0<\/span><\/p>\n – <\/span>TRG<\/b>, a portfolio company of <\/span>Gemspring<\/b> Capital<\/b>, acquired <\/span>Fentron<\/b>, a Westerville, Ohio-based cybersecurity consulting firm. Financial terms were not disclosed.<\/span><\/p>\n – <\/span>Capitolis<\/b> agreed to acquire <\/span>eSecLending<\/b>, a Boston, Mass.-based securities lending business, from <\/span>Parthenon<\/b> Capital<\/b> in a transaction valued at $200 million.<\/span><\/p>\n – <\/span>Stride Consumer<\/b> Partners<\/b>, a Boston, Mass.-based growth equity firm, raised $550 million for its second fund focused on consumer products and services companies.\u00a0<\/span><\/p>\n – <\/span>Azarias<\/b>
jordan.blum@fortune.com
@jdblum23<\/p>\nVENTURE CAPITAL<\/h3>\n
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