The Q3 2025 edition of Cut Through Quarterly presents an evidence-based assessment of venture activity across Australia. This quarter recorded about $1.0 billion in announced funding across 116 rounds (comprised of 85 venture rounds and 31 accelerator rounds). Results point to broad-based activity led by deep-tech categories, rising early-stage valuations, and a continued scarcity of mega-rounds. The report also tracks investor sentiment, graduation dynamics, and gender equity across stages.
Quarter at a Glance
$1.0B total funding from 116 announced rounds; biggest quarter of 2025 by deal count, lifted by accelerators.
One $100M+ round (Firmus Technologies, $330M) accounted for a large share of capital; only 17 deals cleared $10M.
Non-software sectors led funding, with hardware/robotics/IoT and biotech/medtech prominent; climate tech remained resilient.
Valuations rose at every stage, most notably at Pre-Seed, Seed, and Series A; AI-first startups priced at a premium.
Female-founder outcomes improved off a low base: female-only teams rebounded to their best result since early 2023, yet female-led and mixed teams combined were ~11% of capital, a six-quarter low.
Capital Raised & Deal Count
Total capital: ≈ $1.0B
Rounds: 116 (85 venture; 31 accelerator)
Mega-rounds: 1 ($330M Firmus Technologies)
$20–50M bracket: broadly in line with recent quarters
$10M+ rounds: 17 announced
Interpretation: Activity broadened rather than concentrated. The market remains thin in late-stage supply, while accelerators and smaller cheques underpin deal volume.
Stage Dynamics & Valuations
Median deal sizes remained at or near record highs across stages.
Dispersion widened, indicating a more polarised market—some companies command substantial rounds while others struggle to clear targets.
Valuation sentiment
Valuations moved higher at Pre-Seed, Seed, Series A; later stages steadier.
AI-first companies are raising faster and at higher valuations, reflecting strong investor demand.
Sector Activity
Hardware/Robotics/IoT topped both funding and deal counts for the first time this cycle.
Biotech/Medtech sustained strong inflows; Climate Tech extended its multi-quarter streak.
AI remained pervasive across categories (software, hardware, health, logistics), serving as an enabling layer rather than a stand-alone vertical.
Takeaway: Capital is increasingly favouring unique IP, credible regulatory/manufacturing pathways, and commercialisation in science-heavy businesses, while software categories continue to integrate AI as standard.
Largest Announced Rounds
Firmus Technologies – $330M (Hardware/Robotics/IoT)
Morse Micro – $88M (Hardware/Robotics/IoT)
Lorikeet – $54M (AI/Big Data)
Vaxxas – $49M (Biotech/MedTech)
[Logistics/Transport company] – $38M (Transport/Logistics/Supply)
(The report includes additional Series A–B+ rounds across climate, deep-tech, adtech, agtech, and more.)
Investor Sentiment & Portfolio Health
Roughly half of investors described conditions as favourable; a small uplift in “highly favourable” views.
>50% expect to complete more deals than 2024 by year-end.
Marketing/BD gained importance; fundraising from LPs remains a lower priority.
Portfolio signals
Portfolio health modestly improved; bridge rounds remain common to extend runway.
Layoffs and shutdowns stabilised; venture debt usage subdued, suggesting emphasis on discipline and efficiency.
Graduation Dynamics & Market Structure
Startups priced in the 2021–early 2022 boom still face Series B bottlenecks as growth/valuation promises reset.2024 cohort shows stronger early signals (cleaner metrics, more realistic pricing), though AI-driven exuberance requires ongoing discipline to avoid repeating past cycles.
Funding to Female Founders
Female-only teams: best quarter since early 2023, but from a low base.
Combined share (female-only + mixed): ~11% of total capital, the weakest in six quarters.
Pre-Seed representation fell to multi-year lows; accelerators accounted for much of the representation uplift.
Late stage: only one round involved a woman founder.
Implication: Structural gaps persist beyond accelerators—especially at Pre-Seed and post-Series A—highlighting the need for targeted pipeline and follow-on support.
What to Watch in Q4
Set-up is constructive if current conditions persist; to enter the “top-3 deployment years,” Q4 would need to surpass ~$1.3B.
Late-stage supply remains the swing factor; another mega-round would materially shape the annual tally.
Valuation discipline at AI-first companies and capital flows to deep-tech will define risk-reward through year-end.
Conclusion
Q3 2025 marked the broad est deal pace of the year, anchored by accelerators and deep-tech leadership in capital raised. Valuations are trending up at earlier stages, and AI is now embedded across categories. Yet mega-round scarcity, Series B bottlenecks, and uneven gender outcomes remain central to the market’s health.
Access the Full Report
Download the full Cut Through Quarterly – Q3 2025 report to explore sector tables, round comps, and investor sentiment charts in detail.
