Australia tops the world in unicorn creation efficiency, but local startups face a persistent funding drought — especially at the early stage.
Australian startups are proving themselves to be world-class when it comes to creating billion-dollar companies. Since 2000, Australia has produced 1.22 unicorns per $1 billion invested, the highest ratio globally — nearly double that of the United States. Despite this, funding for Australian startups continues to fall short compared to global innovation hubs.
In 2024, Australian startups raised only $3.4 billion, according to data from PitchBook — a steep drop from the $6.5 billion peak in 2021. The sector is facing a prolonged funding winter, with early-stage Australian startups being hit the hardest.
According to a report by Side Stage Ventures, Dealroom.co, and Amazon Web Services, early-stage Australian startups secured just $1 billion in 2024 — far behind the $24 billion raised in the US and $10 billion in China. This shortfall comes despite China’s recent struggles with a private sector crackdown, which has pushed it off the global unicorn-efficiency list entirely.
The local innovation ecosystem continues to battle structural challenges: a small domestic market, limited local capital, and geographic isolation from major venture capital centers like Silicon Valley and Beijing.
Still, global success stories like Canva Inc. and Atlassian Corp. show what’s possible. “Access to capital remains a big challenge when competing with companies and founders in other countries,” said Ben Grabiner, co-founder of Sydney-based Side Stage Ventures. “But more people are realizing the potential in the Australian startup ecosystem.”
Software remains the most dominant sector among Australian startups, with a strong focus on scalable, export-ready products. Alongside Canva and Atlassian, companies like WiseTech Global Ltd. (logistics software) and Afterpay Ltd. (fintech) have reached multi-billion dollar valuations and found success on the global stage.
Other emerging sectors in the Australian startup landscape include energy, health, and creative industries. With increasing demand for renewable energy in the region, solar innovation is a key area of growth, said Grabiner.
The funding challenges are compounded by a limited domestic investor base. In 2024, 39% of early-stage funding in Australian startups came from international investors — a higher percentage than in both the US (21%) and Europe (27%).
Yet this funding gap may offer a silver lining. According to Phil Cummins, managing director at StepStone Group, seed-stage Australian startups have lower valuations and smaller fund sizes compared to their US and European counterparts — creating unique opportunities for investors willing to bet early.
“At this point, it’s no longer a question of whether Australian startups can survive,” said Grabiner, “but how well they can perform.”
