Why This Matters

The Australian startup ecosystem is experiencing a fundamental shift. While 2021’s investment frenzy may feel like a distant memory, last year marked the start of a more disciplined, opportunity-rich funding landscape. For founders, investors, and innovation leaders, this means playing by new rules—ones that prioritise sustainable growth, measured risk, and strategic investment over hype.

At Disruptors Co, we work with government agencies, corporates, and scaleups to translate bold ideas into real impact. Here’s what the latest Cut Through Ventures 2024 Startup Funding Report means for the innovation ecosystem—and how you can position yourself for success in 2025.

1. Australia’s Innovation Economy Needs Stronger Support

Government agencies, it’s time to rethink policy

Australia’s innovation sector continues to punch below its weight. We invest only 1.7% of GDP in research and development, well below the OECD average of 2.5%. This underinvestment is pushing our top talent and most promising startups offshore.

The biggest red flag? None of Australia’s unicorn startups plan to list on the ASX. The domestic market simply isn’t seen as a viable launchpad for global growth. If we want Australia to be more than just a resource-driven economy, we need policies that:

✅ Remove bureaucratic barriers to startup growth
✅ Improve R&D tax incentives
✅ Strengthen pathways for research commercialization

Climate tech is a prime example. While it led the deal count in 2024, many startups still struggle to secure later-stage funding without turning to international investors. Australia risks losing its best ideas if we don’t bridge this funding gap.

📌 Our Takeaway: Government agencies must take the lead in fostering a startup-friendly policy environment. The National Reconstruction Fund is a start, but targeted funding models are critical to keeping high-impact innovation in Australia.

2. AI, Fintech & Climate Tech Are Leading the Next Wave of Innovation

Corporates and scaleups: Where to invest your time and resources

During 2024, AI dominated global venture capital conversations, but in Australia, its impact was felt through verticals like fintech, enterprise SaaS, and healthtech, rather than standalone AI-first companies.
Here’s where the funding went:

💰 Fintech topped the charts with $947M raised (a strong rebound after a slow 2023).

🌱 Climate Tech secured $609M, making it the most active sector by deal count.

🩺 Biotech & Medtech saw a combined $347M in funding, reflecting growing investor confidence in health innovation.

What does this mean for corporates looking to stay ahead?

Enterprise SaaS is shifting toward AI-powered automation. Static software is being replaced by intelligent workflows, meaning companies must rethink their digital transformation strategies.

Healthtech and climate tech are seeing sustained investor interest. This presents strong opportunities for corporate-startup partnerships.

📌 Our Takeaway: Companies that integrate AI into their core offerings (rather than treating it as a standalone product) will see the most long-term value. Investors and enterprises should focus on collaborations in fintech, climate tech, and health innovation.

3. Scaleups Are Facing New Funding Realities

Series A & B startups: The rules have changed

The data shows a clear shift in investor expectations:

📉 Later-stage funding (Series A & B) saw deal volumes increase but valuations drop.

💡 Investors now demand stronger revenue models before writing large cheques.

🤝 Bridging rounds made up at least 20% of investments, reflecting the challenges for startups adjusting to new valuation benchmarks.

This marks the end of the “growth at all costs” mindset. Founders must now prove market traction, efficient operations, and capital discipline before securing their next round.

📌 Our Takeaway: If you’re a scaleup raising Series A or B, focus on revenue stability and clear unit economics. Investors are willing to write big cheques—but only for startups that demonstrate resilience and long-term viability (this is the focus of our Gap Blitz program with CSIRO)

4. Early-Stage Startups Are Thriving—But Competition is Fierce

Founders: The window is open, but you need to be ready

The report indicates there’s good news for early-stage founders:

🚀 Seed-stage funding has rebounded, with median deals reaching $3M.

💰 Pre-Seed rounds now average $1M, reflecting investor appetite for high-potential startups.

🔥 Investors are showing more discretion, focusing on founders who have validated their business model before raising capital.

This is a stark contrast to the 2021 funding boom, where unproven ideas attracted large investments. In 2024, startups that spent time refining their business before fundraising attracted better deals.

📌 Our Takeaway: If you’re a founder, don’t rush to raise capital until you have clear validation points. Investors are rewarding businesses with proven traction rather than speculative ideas.

5. Gender Equity Gains in Early-Stage, But Gaps Remain at Scaleup Levels

One of the most encouraging trends from the report:

👩 42% of Angel & Pre-Seed deals included women founders, up from 27% in 2023.

🚀 29% of Seed rounds had women founders, a significant increase from 20% in 2023.

However, this momentum stalls at later stages:

❌ Only 19% of Series A and 16% of Series B+ rounds had women founders.

💸 Overall capital raised by women-led teams fell from 18% in 2023 to 15% in 2024.

This highlights a persistent funding gap for female founders beyond the early stages. While we’re making progress in getting women-funded at the start, growth-stage capital remains disproportionately male-dominated.

📌 Our Takeaway: Investors and ecosystem players must focus on supporting women-led businesses beyond Seed stage. Mentorship, targeted funding, and structural support will be key to closing the gap.

What’s Next for Innovation in 2025?

💡 74% of investors believe deal volumes will rise in 2025.

📈 AI, HealthTech, and ClimateTech will continue to attract strong funding.

🌍 Global investors are increasingly backing Australian startups, helping them scale internationally.

While we may never return to the free-flowing VC capital of 2021, we’re now operating in a more stable, resilient, and opportunity-rich funding environment. For founders, investors, and corporates, this is an era of purposeful innovation—where those who execute well will thrive.

Let’s Talk

At Disruptors Co, we help startups, corporates, and government agencies navigate Australia’s evolving innovation landscape. Whether you’re looking to refine your go-to-market strategy, develop an innovation roadmap, or secure investment, we can help.

📩 Get in touch to discuss how we can support your next move.