Australian start-up funding rebounds to over $1 billion across Q3

Investing

Despite a continued drought of mega-deals, Australia’s venture funding climbed back to the billion-dollar mark in Q3, driven by a surge in accelerator activity and heightened investor appetite for deep-tech and AI-focused companies.

Key Takeaways

Australian start-ups raised $1.0 billion across 116 announced rounds, comprising 85 venture rounds and 31 accelerator rounds. This was the biggest quarter of 2025 by deal count, according to the Cut Through Venture, Quarterly Funding Report.
Capital concentrated around hardware, biotech and other sciences, with non-software startups receiving the most funding. Investors favored deep tech and unique IPs.
Valuations rose across all stages, especially for AI focused startups, which now command premiums.
Only one $100 million plus round was announced, Firmus Technologies’ $330 million mega-round. This was 3.75 times larger than the second-biggest round. Other late-stage activity was sparse, with only 17 deals exceeding $10 million.
Despite female-only-led startups recording their strongest performance since early 2023, overall funding to female-only and mixed-gender founding teams accounted for just 11% of total capital raised. This was the weakest outcome in six quarters.

Big numbers

$1.0 billion. That’s how much Australian start-ups raised across Q3 2025, according to Cut Through Venture’s latest Quarterly Funding Report. This marked a return to the billion-dollar threshold after a slower first half of the year.

85 venture rounds and 31 accelerator rounds were announced, making it the biggest quarter of 2025 by deal count.

But the headline figure tells only part of the story. Firmus Technologies’ $330 million mega-deal, which crowned it Australia’s newest ‘unicorn’, accounted for a significant portion of capital. Without it, funding total would have remained broadly in line with previous quarters, underscoring how rare nine-figure rounds have become.

By sector, Hardware and Biotech/Medtech led total capital raised with $600 million in capital raised over 24 deals.

100% of Series B+ rounds were male-led, Skutopia was the sole women-led startup to record a late-stage deal, marking a concerning decrease. The report says, ‘Seed and Series A were the only stages performing in line with the medium-term average.’

What to watch for

Investors say their top priority for the next quarter is to invest in new startups, although a focus on marketing and business development has emerged.

General sentiment is holding firm, about half of surveyed investors described conditions as favourable. Portfolio health has seen modest improvements, steadier company performance and increased confidence in market fundamentals reported.

“Many investors are still encouraging bridge rounds to extend runway, reflecting limited access to new capital rather than growth ambition,” the report states. “Layoffs and shutdowns appear to have stabilised, while venture debt usage remains subdued, suggesting a continued focus on discipline and capital efficiency over expansion.”

Nevertheless, valuations appear to have climbed in Pre-Seed, Seed, and Series A rounds; 77% of investors reported increased valuations at the Series A stage. Over the remainder of the year 65% believe valuations will stay the same, while 19% indicate a rise may occur.

Hardware and deep-tech are driving the recovery, but AI remains the engine behind investor enthusiasm. ‘Founders with clear AI angles are raising faster and often at valuations reminiscent of the 2021-era,’ says the report. For the fifth straight quarter, AI and big data topped investor sentiment rankings, 84% of investors saying valuations for AI-first startups are higher or significantly higher than their peers.

The market appears in good health, according to Venture ‘deal activity remained diversified, with capital spread across various sectors, suggesting a maturing market that is no longer dominated by a handful of mega-rounds, but instead driven by consistent mid-sized raises.’