Australia's technology sector has staged a defiant recovery, with start-up funding surging to $5.1 billion in 2025—a $1 billion increase over the previous year.
According to the latest State of Australian Start-up Funding report by Cut Through Venture and Folklore Ventures, this "AI gold rush" marks the strongest investment period since the 2022 market correction.
Artificial Intelligence now dominates the landscape, accounting for 61% of all capital deployed, as local investors shrug off concerns of a speculative bubble.
The year was defined by massive "mega-rounds" concentrated among industry titans.
Firmus Technologies, an AI infrastructure player, secured a staggering $830 million—including backing from Nvidia—to become the nation’s newest "unicorn" with a $6 billion valuation.
Payments giant Airwallex followed closely, raising $730 million across two major rounds. While total capital rose, the number of deals actually contracted from 470 to 390, signaling a flight to quality.
Beyond the giants, a new cohort of "core AI" start-ups, including Andromeda and Lyrebird Health, are reportedly growing twice as fast as traditional software-as-a-service firms.
While market sentiment is buoyant and portfolio failures have decreased, diversity remains a persistent challenge: all-female founding teams secured just 2% of total capital.
Nevertheless, with layoffs slowing and fewer "down rounds" reported, the ecosystem enters 2026 with a balanced, performance-driven momentum.