Australian startup funding rose by approximately $500 million in 2024 amidst both heightened interest in larger investments and record activity for pre-seed and seed deals, although the majority of investors took part in down rounds that saw some of their investments devalued.
The State of Australian Startup Funding Report released today has revealed $4 billion was allocated across 414 deals, with around half the capital coming from eight deals that exceeded $100 million each.
The report's authors claim this rebound to Australia's third-largest overall funding year, alongside stabilising valuations, marks a shift back to more balanced deal terms and highlights an improving market outlook for investors and founders.
Around 1,000 founders, investors and angels provided insights for the report, with the data showing a surge in early-stage activity and deal size as pre-seed medians surpassed $1 million and seed rounds approached $3 million.
Even though total amounts raised increased, investors were more cautious with 65 per cent reporting participation in a down round, especially those who took part in later stage growth-rounds.
Meanwhile, 55 per cent reported having a failed portfolio company, up from 42 per cent in 2023.
Even though seasoned investors are bullish, just over half believe investment activity will increase this year at 51 per cent, which compares to more than two-thirds (67 per cent) in the prior year.
The number of $50 million-plus rounds was up 40 per cent, including the eight $100 million-plus raises.
Australia's largest announced startup capital raises above $50m
- Betashares ($300m)
- Hysata ($172m)
- Bugcrowd ($156m)
- Fleet Space Technologies ($150m)
- Guzman y Gomez ($135m)
- Cover Genius ($120m)
- Honey Insurance ($108m)
- Hammertech ($105m)
- Samsara Eco ($100m)
- Omniscient Neurotechnology ($89m)
- Q-CTRL ($86m)
- SafetyCulture ($75m)
- Jet Charge ($72m)
- Aravax ($66m)
- Athena Home Loans ($62m)
- Grow Inc ($60m)
- InDebted ($60m)
- Deputy ($55m)
- Gilmour Space ($55m)
- Raygen ($51m)
- Constantinople ($50m)
- Myriota ($50m)
The total number of announced deals declined, which the report authors claim was partly driven by fewer accelerator program cohort announcements. In May last year, data compiled by Techboard revealed that in 2023 there were more fintech deals kept quiet than formally announced, and it would not be surprising if this trend continued into 2024.
Heading into 2025, investors are cautiously optimistic, with dealflow and funding increasing steadily closer to the end of the year and into 2025, from what data suggests.
The return of global investor interest further signals an uptick in the market, with international investors participating in 57 per cent of reported deals, reflecting the country’s growing appeal as a hub for capital-efficient startups and world-class technical talent.
"We are proud to release the fourth edition of The State of Australian Startup Funding, bringing together trusted insights and data that shine a light on the evolution of our local ecosystem," says Cut Through Venture founder and venture capitalist at Five V Capital, Chris Gillings.
"In 2024, we saw remarkable resilience and adaptability as Australia’s startup sector navigated a challenging global environment.
"Funding has rebounded, bolstered by stabilising valuations, a disciplined focus on quality, and renewed international interest. More founders are raising smarter, more deliberate rounds, and investors are competing for standout opportunities across key sectors like AI, HealthTech, and ClimateTech."
Gillings, a co-author of the report, believes the ecosystem is poised for sustainable growth with a unique blend of global ambition, scrappy founders, and supportive investors continuing to drive Australia’s reputation as an emerging innovation hub.
ALIAVIA Ventures co-founder and managing partner Marisa Warren notes in the report that US and international investors are showing real excitement around Australian startups, and for good reason.
"Early stage Australian startups are very capital-efficient, with valuations 50 to 60 per cent lower than comparable US deals, whilst alsobuilding incredibly innovative companies, making them highly attractive for global investors and potential acquirers," explains Warren, whose company is based in California.
"When Aussie startups do expand into the US, they see healthy valuation uplifts and significant traction. However, navigating cultural nuances, different customer buying behaviours, and US investor expectations can be challenging."
A higher proportion of investor respondents were aged under 40 (46 per cent) compared to founders (39 per cent), of whom only 5 per cent were in their 20s versus around one in every five investors taking part.
Founders were much more likely to be based in Queensland (19 per cent) versus investors (10 per cent), and a respondent founder was doubly likely to be from Western Australia compared to investors (4 per cent versus 2 per cent).
Whilst just 5 per cent founders in the report were in their 20s and only 1 per cent were aged younger than 20, NextGen founding partner Mitchell Hughes highlights how young founders "illuminate the edges of
resourcefulness and adaptability".
"Unanchored by traditional thinking, they shine brightest in uncertain times," Hughes says.
"This generational wave of young ambition continues to surge into uncharted territory. In 2024, over 10 student-founded startups raised their first venture capital, including two who set sail for Y Combinator," he says in reference to Phonely and Edexia.
Founders and investors also shared wildly different expectations about how they would exit, with 92 per cent of founders believing an acquisition from another company was the most likely outcome whereas 46 per cent of investors believed this would the most likely scenario.
NiceTo founder and chief executive officer Preethi Mohan highlights the cultural diversity of Australia's startup ecosystem with 28 per cent of founders in the report coming from non-English speaking backgrounds.
"This progress is exemplified by one of the year’s largest acquisitions, led by Bangladeshi migrant Robin Kudha," says Mohan.
However, with a larger sample size in the recent report the portion of founder respondents identifying as white or caucasian rose significantly from 53 per cent to 71 per cent. New Zealand or Pacific Islander was the second-largest ethnic group at 6 per cent, followed by South Asian (5 per cent), East Asian (3 per cent) and Southeast Asian (3 per cent).
Only 14 per cent of founders in the previous report were female, whereas in the latest edition 40 per cent were women.
Folklore Ventures’ founder and managing partner Alister Coleman says building breakthrough technology and an industry to support the sector's ambitions will take time, noting we cannot afford for scepticism and impatience to "wet blanket the ambitions of our brightest minds and future success stories, for this year’s report shows there is much to be encouraged about".
"In producing this report we hope to shed light on the evolution of venture capital in Australia, an industry that largely didn’t exist 10 years ago and the gains that come from investing in early stage ambition," says Coleman, another of the report's co-authors.
"In 2024 more than $4 billion was invested into new companies, new technology, and new paths for Australia’s best and brightest, and Australia continues to show its capacity to generate efficient and world class early stage companies that attract the attention and capital of some of the best investors globally."
He says a notable 74 per cent of investors expect investment levels to increase in 2025, reflecting a climate of guarded optimism following recent market volatility.
"Key sectors such as AI, enterprise software and health-tech are positioned for further growth, with momentum in early-stage funding expected to persist as competition intensifies for promising startups," he says.
"If trends hold, 2025 could mark a pivotal year for Australia’s startup ecosystem, leaving it stronger, more mature, and better positioned for sustainable long-term success."
Positive sentiments were also shared by other major stakeholders in the VC sector.
"We're back! Early-stage deal flow has accelerated and growth rounds are back on the cards," says Airtree partner Jackie Vullinghs.
"We saw higher deal flow than ever before, with 2024 our busiest year on record. We invested more capital and made a higher number of investments into ANZ startups than 2023, and we had a record number of founders coming in to pitch to our investment committee," adds Blackbird Ventures general partner Michael Tolo.
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