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Good morning, VC enthusiasts. Today’s edition looks at where capital is actually going at scale: tunnels, employee liquidity, and late-stage deep tech. From a $154M Loop deal in Dubai to €750M raised for European Series B-C, here’s what matters.
In today’s Inside/VC edition:
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LET’S START WITH ELON
Image Source: Website The Boring Company
The Inside: Dubai has approved its first international Loop project with The Boring Company, a $154M, 4 mile EV only tunnel connecting DIFC to Dubai Mall and marking Elon Musk’s first Loop deployment outside the US.
The details:
The Loop will operate as an EV only public shuttle using Tesla vehicles run by Boring Company staff.
Construction is set to begin immediately, with the first phase targeted for completion in one to two years.
The initial route is expected to handle ~13,000 passengers per day, scaling to ~30,000 daily as the network expands.
A full buildout could reach 15 miles with 19 stations, at an estimated total cost of $545M.
Why it matters:
This is the first real international test of Musk’s tunnel transit model in a dense global city. If Dubai can make small bore tunnels work at scale, it strengthens the case for Loops as a faster to deploy alternative to traditional metro systems, and raises the stakes for projects like the still controversial Music City Loop in Nashville.
VC INSIGHTS
Image Source: erhui1979 / Getty Images
The Inside: Secondary sales are quietly shifting from founder cash outs to employee retention tools, as fast growing startups like Clay, Linear, and ElevenLabs use tender offers to give staff early liquidity while staying private longer.
The details:
Clay allowed employees to sell shares at a $1.5B valuation shortly after its Series B, then again at $5B, after tripling ARR to $100M in one year.
Linear completed a tender offer at the same $1.25B valuation as its Series C.
ElevenLabs authorized a $100M employee secondary at a $6.6B valuation, double its prior mark.
Unlike the 2021 cycle, these tenders are structured to include broad employee bases rather than founder-only payouts.
Investors increasingly view employee liquidity as acceptable, while large founder secondaries remain frowned upon.
Why it matters:
As startups stay private longer and compete harder for talent, employee tenders are becoming a retention lever, not a red flag. The tradeoff is systemic: more private liquidity helps companies hire and keep talent, but delays IPOs and pushes liquidity pressure further down the VC to LP stack.
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SHORTS
Image Source: WSJ
A march backing California’s billionaires attracted only a few dozen attendees in San Francisco, despite generating outsized attention online, with reporters reportedly outnumbering demonstrators at the event.
The protest targeted a proposed Billionaire Tax Act that would impose a one time 5 percent wealth tax on Californians worth over $1B, a measure Governor Gavin Newsom has said he would veto if it passed.
Andreessen Horowitz general partner Jennifer Li warned that much of today’s AI ARR hype is built on run rate math rather than durable recurring revenue, saying founders should be skeptical of flashy growth numbers shared on social media.
Speaking on TechCrunch’s Equity podcast, Li said sustainable growth driven by retention and expansion matters more than racing to $100M ARR, noting that even extreme growth cases like Cursor, ElevenLabs, and Fal.ai worked because of underlying business quality, not just speed.
Amazon and Google are planning $200B and $175-185B in capex for 2026, far ahead of peers like Meta ($115-135B), Microsoft (~$150B annualized), and Oracle (~$50B).
The logic inside Big Tech is that high end compute will become a scarce input and owning supply matters, but investors have pushed back hard, with stocks falling as spending projections climb and questions grow around how quickly this capex can turn into real returns.
FUNDRAISING
📰 Everything else in VC & fundraising today
Benchmark Capital just invested $225M via special purpose funds into Cerebras Systems’s $1B round at a $23B valuation, backing the Nvidia rival ahead of a planned IPO in Q2 2026.
Reddit said it is actively exploring more acquisitions, with a focus on adtech and other capabilities that can be scaled across its user base, after reporting $726M in quarterly revenue and 121.4M daily active users.
Mundi Ventures announced a €750M first close for Kembara Fund I, targeting ~€1B at final close to back European deep tech and climate companies at the Series B and C stage.
→ Small Fun Fact 👇 ←
Crypto.com just bought AI.com for $70M, the most expensive domain acquisition ever, betting that owning the most obvious AI URL on the internet will pay off as it launches a consumer AI agent during the Super Bowl.
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That's it for today!
See you soon,
Jannis & Felix — the humans behind Inside/VC