You can argue over the state of investment for women until the (100% female) cows come home – surprise, surprise, it was shit again in 2024 – but there’s other data in The State of Startup Funding Report 2024 that suggests all is not well in the state of venture capital.
More than half (55%) of the venture funds responding for the 4th annual report said they had a portfolio company fail last year. That a 25% increase on 2023’s 42%.
In terms of the venture Power Law, that suggests the voltage is flickering, with brown outs.
The 129-page report doesn’t post mortem those failures, but there was no shortage of reports in 2024 of investors turning off the tap when founders came knocking for additional funds. The valley of death, once seen as an early stage issue, is now turned into a rite of passage for later stage startups when it comes to company failure.
Theoretically, a majority of startups should fail, but the Lucky Country’s been remarkably lucky in avoiding them. The sudden increase isn’t explained but may reflect the zombie startups who managed to survive the pandemic before the well finally well dried up after substantial capital had been poured in. And the may not change, anecdotally, many tell Startup Daily that plenty of zombies still roam tech.
Countering that shift, the number of $50m-plus rounds increased from 15 in 2023 to 21 in 2024.
The other notable figure playing in favour of the VCs after the pandemic bubble is that nearly two-thirds (65%) of investors backed a down round, where the startup’s valuation fell.
That’s not always a sign of Stage 4 metastatic failure.
Remember that Commonwealth Bank-backed Swedish BNPL Klarna raised in 2022 at an 85% hammering to its previous A$40bn valuation when it raised US$1 billion in March 2021. There’s now talk of an IPO this year at a valuation above $30bn. Such is life.
While three-quarters of founders (74% , down from 75% in 2023) will be door-knocking for cash in the year ahead, the misalignment is that VCs are not going the whet the whistle on their dry powder they love talking about, with sentiment falling. Only 51% believe investment activity will increase this year, down from 67% in 2023.
More than 9 out of 10 (93%) portfolio companies shed staff last year, which should send shivers through risk averse politicians who love to issue press releases about jobs, jobs, jobs when they back the startup sector.

Source: The State of Startup Funding Report 2024
The good news is international investors participated in 57% of reported deals.
It was still a pretty good year for local startups as AI became the year’s Bored Ape Yacht Club NFT go to for venture (although it now at least has some obvious value).
The 2024 edition of the Cut Through Venture and Folklore Ventures report concluded that A$4 billion was poured into 414 VC deals, an 11% increase on 2023. The report says it’s third largest funding year on record, although if you account for CPI, that increase in capital deployed is a long way from double figures.
The report argues the numbers are a shift back to more balanced deal terms and improving market outlook for investors and founders.
Competing analysis
The numbers differ from the findings of OG investment analysis firm Techboard, which released its 2024 report the day before, concluding that investors poured $4.106 billion into 477 private investments. Techboard focused on additional ASIC-sourced data last year, because the industry regulator unearthed funding unannounced in the media.
The Techboard report’s conclusion was that overall level of investment was 7% lower than 2023 figure of $4.44 billion, making it their 4th highest level.
The State of Startup Funding Report surveyed around 1,000 founders and investors for its data, including 126 venture capital funds, angel syndicates and “ecosystem champions”.
Among its key findings was an increase in early stage activity and deal sizes in 2024, with the pre-seed median above $1 million and seed rounds approaching $3m.
Fintech led 2024 with $947 million raised, building on 2023. ClimateTech followed with $609m, and topped deal volume, while biotech and medtech raised $347m combined.
Investing in women
Now to the elephant in 50% of the startup room, funding for women.
Congrats ladies, startups led by women or with one as a founder scored 42% of angel and pre-Seed cash and 29% of Seed dosh. Perhaps it reflects a concerted push by the likes of LaunchVic’s Alice Anderson Fund.
But after that, sisters are doing it for themselves. The pie of Series A funding fell from 2023’s 22% to 19%. Series B? You’ve got around a 1-in-6 chance of a yes, at 16% for a Series B and beyond.
And for all the sound and fury, signifying nothing, 15% of the cash went to startups who at least said a woman was in the founding team. That’s down from 20% in 2020 and 18% last year.
So ladies, bring your own plate.
Hot competition
Cut Through Venture founder and Five V Capital investor Chris Gillings said investors are competing in key sectors such as AI, healthtech, and climatetech.
“As we look ahead to 2025, the ecosystem is poised for sustainable growth, with a unique blend of global ambition, scrappy founders, and supportive investors continuing to drive Australia’s reputation as an emerging innovation hub,” he said.
Folklore Ventures founder Alister Coleman, who backed the report, said “we cannot afford for skepticism and impatience to wet blanket the ambitions of our brightest minds and future success stories” saying the 2024 figures were encouraging in a reminder that investors share .
“Key sectors such as AI, enterprise software and HealthTech are positioned for further growth, with momentum in early-stage funding expected to persist as competition intensifies for promising startups,” he said.
“If trends hold, 2025 could mark a pivotal year for Australia’s startup ecosystem, leaving it stronger, more mature, and better positioned for sustainable long-term success.”
Download the report here.
Trending
Daily startup news and insights, delivered to your inbox.