The State of Australian Startup Funding 2024

Folklore is pleased to present the 2024 State of Australian Startup Funding Report, co-authored by report partner, Cut Through Venture.

Now in its 4th year, this report offers the largest crowd sourced data set on the Australian startup landscape, and emerging investment trends. Drawing from thousands of data points, this report highlights both the achievements and milestones reached within just a decade of venture capital in Australia.

Folklore continues to be optimistic about the future of boundless Aussie ambition, as the country continues to strengthen its position as a key player on the global stage. Folklore’s Alister Coleman, states his opening remarks:

“With the support of our industry, Folklore Ventures and Cut Through Venture hope to provide a collective understanding of Australia’s startup funding landscape and local startups competing globally, and to encourage the next generation of founders to start great Australian technology companies.

Over the last 12 months we saw improved investor confidence and increased deal volumes in seed rounds, alongside an uptick median round sizes. Statistically seed stage investment weathers VC market downturns best, and Australian seed stage allocations have recovered from their 2023 lows. If this last year of recovery rhymes with history, and if one considers history a marker for the future, there is good reason to be optimistic about 2024 vintage companies.

One would strain to not see a common focus across our industry as AI became more discussed and debated, as discretion over “AI” investments became more discerning, and early exits reinforced an emerging understanding of AI’s rapid change. Yet the story is not just one of positive sentiment towards AI, broad investment activity in healthtech, robotics and automation, fintech, cyber, climate tech and B2B SaaS bodes well for industries where a critical mass of prospective investments is emerging.

However, the Australian startup landscape is not yet experiencing wholesale up-and-to-the-right investment activity. Whilst Series A and B deal volumes increased, median deal sizes fell and valuation elasticity took hold as the cohort of 2021/22 funded startups adjusted to contemporary valuation metrics. In 2024 the operating zeitgeist of Series A and B companies settled into a cold bath of sustainability and more patient growth. And that’s not all that bad, for we Aussie’s are a resilient bunch, and an uptick in A$50m-plus rounds indicates we have good reason to be optimistic about a cohort of startup teams more efficient in operation, battle-scarred from challenge, and primed to build globally.

It is important to remember that building successful companies and breakthrough technology takes time, and as time passes, we move closer to a coming wave of liquidity and returns. Yet investing in startups is all about asymmetric returns, and not plodding to the finish line with modest outcomes, it is full of missteps and missed opportunity, and feedback loops intended to create something of value. Whilst short-termism may get the better of those seeking quick gains, or spur some to comment on everything and risk nothing, we should not allow cynicism and impatience to wet-blanket the ambitions of our best and brightest. This coming liquidity wave will not merely benefit investors, it will also act as a distribution of wealth between investors, founders and startup teams benefiting from employee option plans, and fuel a generational effect of continued investment and the creation of new startups and jobs in Australian technology.

We are living through the evolution of the Australian VC sector and we believe collective awareness and collective encouragement is needed to ensure we collectively succeed. We hope you enjoy the insight shared in this Report, for 2024 shows there is much to be encouraged about.”

We trust that you will find the insights shared within the report both informative and valuable, and we hope it serves as a meaningful resource as we continue to navigate the dynamic landscape of venture capital and entrepreneurship in Australia.

Access the latest report