State of Australian Startup Funding 2022: Resilience Amidst Global Turbulence
2022 was a year of stark contrasts for the Australian startup ecosystem. While overall venture capital funding saw a significant 30% drop from the record highs of 2021, the year still marked the second biggest funding year on record for Australian startups. The market experienced a dramatic shift mid-year, transitioning from the momentum of 2021 to a more cautious andselective environment.
This comprehensive State of Australian Startup Funding 2022 report, brought to you by Cut Through Venture and Folklore Ventures, unpacks this complex year.It provides essential data, analysis, and insights into the trends, challenges,and opportunities that defined the Australian venture capital landscape, offeringcritical context for founders, investors, and policymakers
A Comprehensive Analysis of Australia’s Venture Ecosystem in a Year of Global Uncertainty
Explore the definitive annual report capturing the data, trends, and investor insights that shaped Australia’s startup landscape in 2022. This report presents a grounded, data-driven view into a year that saw early-stageinvestment reach new highs, late-stage capital retract, and foundational shifts in founder and investor sentiment.
Executive Summary
The State of Australian Startup Funding 2022 report provides adetailed, evidence-based examination of the funding dynamics that defined Australia’s startup ecosystem in a year marked by global market volatility. Backed by contributions from over 800 investors and hundreds of founders, the report consolidates data across funding stages, sectors, investor types, and founder demographics.
It offers critical insight into the state of early-stage capital,mega-deals, sector-specific trends, and emerging funding mechanisms like venture debt and crowdfunding—without the noise.
Early-Stage Resilience, Late-StageRetraction
Early-stage deal volume remained robust, with a strong showing across Seed and Series A despite macroeconomic pressures.
Later-stage capital cooled sharply, with a marked drop in mega-deals (28deals over $50M, totaling $3.4B—down from 2021).
Median early-stage deal sizes heldsteady, suggesting amaintained confidence in emerging ventures.
Sector Investment Breakdown
Fintech, Healthtech, and ClimateTech led funding by volume and number of deals.
Web3 and Blockchain saw contraction, aligning with global trends of capital pullback inspeculative markets.
Enterprise software remained a steady performer with consistent late-stage activity.
Gender & Indigenous Participation
Early-stage funding for women-founded startups reached a record high, while late-stage funding continued to lag.
The gender equity gap remains pronounced at later stages, with a small share of total dollars raised by women-led companies.
Indigenous entrepreneurs continue to face unique barriers, though support programs are gaining traction.
Investor Behavior & Sentiment
Over 800 investors participated in funding rounds across the year.
Dry powder remained abundant, signaling investor readiness despite fewer large cheques written.
Corporate VCs remained active, thoughmore selective, often following instead of leading rounds.
Deep Dives by Funding Type
Venture Debt
Usage grew as founders sought alternative financing to extend runway.
Seen as a stabilizing force for growth-stage companies in a risk-averse environment.
Angel Investing
Strong activity from former startup employees turning angel investors.
Women angels gained momentum, with optimistic outlooks and increasing ticket sizes.
Crowdfunding
A record-breaking year, particularly in Food & Beverage sectors.
Offers a complementary route for consumer-facing startups to raise earlycapital.
Notable Statistics
$3.4B raised in deals over $50M, down from $8B+ in 2021.
Top sectors by capital deployed: Fintech, Enterprise Software, Health/Biotech, ClimateTech.
More early-stage funding for women-founded startups than any previousyear.
Venture debt usage up 45% YoY, particularly among post-Series A companies
Outlook for 2023
Despite global headwinds, the Australian ecosystem demonstrated notable resilience in 2022. The early-stage segment remained buoyant, underpinned by strong founder pipelines and investor dry powder. The late-stage correction,while significant, is seen as a recalibration rather than a retreat.
Expect continued diversification in funding mechanisms, growing emphasison profitability, and increased scrutiny from later-stage investors.
Read the Full Report
Gain access to the most complete data set and insights into Australia’s startup investment landscape in 2022. Understand where capital flowed, which sectors thrived, and how founders and investors are preparing for the year ahead.
