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Podcast

Funding Is Up. But The Game Has Changed

By February 20, 2026No Comments

Between December 2025 and mid-February 2026, the Australian startup ecosystem delivered a clear signal – capital is flowing again, but with far more discipline.

The market is not frozen. It’s selective.

And that distinction matters.

$5.1 Billion Raised – With Fewer Bets

According to Cut Through Venture’s State of Australian Start-up Funding report:

  • $5.1 billion raised in 2025 – up $1 billion on 2024

  • 390 investments completed – down from 470

  • 61 percent of total capital – $3.1 billion – flowed into AI-enabled startups

Capital hasn’t disappeared. It has concentrated.

Investors are writing larger cheques into fewer companies. The era of broad experimentation is giving way to precision.

Major raises reinforce the shift:

  • Checkbox – $100m

  • Operata – $100m

  • Splose – $46m

  • Fluency – $30m

The message is simple. Show traction. Show AI depth. Show durability.

New Unicorns Reflect Infrastructure Thinking

Two new billion-dollar companies emerged:

  • Gilmour Space – Australian rocket company raising over $200m

  • Neara – AI-driven digital infrastructure modelling platform raising $90m

Notice the pattern. These are not lifestyle apps. They are infrastructure plays.

Deep tech, sovereign capability and critical systems are attracting capital.

Investors are backing companies solving structural problems, not surface-level ones.

Venture Capital Still Has Dry Powder

Funds are far from empty:

  • EVP launched a $100m fund

  • Square Peg closed $650m in its latest raise

  • Second Quarter is raising Fund III targeting a $2.6B opportunity

The money is there. But it demands performance.

This is finals basketball energy. The rotation tightens. Only the strongest operators stay on the floor.

IPO Window Still On Pause

While funding improved, public market exits remain cautious:

  • ROKT confirmed no IPO in 2026

  • Airwallex faces regulatory delays

  • Canva remains private but now outpaces Atlassian in Australian tech valuation

However, selective exits are occurring:

  • HotDoc sold to Potentia Capital for over $200m

Strategic buyers are active. The floodgates are not.

Global Shockwaves

Globally, Elon Musk moved aggressively:

  • Tesla invested $2B into xAI

  • xAI folded into SpaceX

  • Combined valuation – $1.25 trillion

Starlink ran its first Super Bowl ad while SpaceX publicly discussed long-term plans for lunar and Mars development.

Whether ambitious or audacious, scale thinking continues to attract capital.

Leadership And Structural Shifts

Key local movements:

  • Michael Batko stepped down as Startmate CEO

  • Robyn Denholm departed the Tech Council of Australia

  • Culture Amp appointed Caroline Rawlinson as CEO

At the same time:

  • Sendle shut down

  • LaunchVic began winding down

  • SXSW Sydney was cancelled

Creative destruction continues.

What This Means For Founders In 2026

The opportunity is still significant. But the standard has risen.

  • AI integration must be real, not cosmetic

  • Unit economics must be clear

  • Capital efficiency is back in focus

  • Infrastructure and deep capability are rewarded

The market has not disappeared. It has matured.

And mature markets favour disciplined builders.

Enjoy the Vlog 📺 🎧