Australian startup funding rose 80% in Q3, even without the Firmus megaround, but big deals still dominated

Australian startups raised $1.31 billion in the September quarter after excluding Firmus, the AI data centre builder whose planned ASX listing was pulled, according to Cut Through Venture (CTV) in its Q3 report. That represents growth of nearly 80% on the comparable 2025 quarter, which CTV puts at $730 million after removing a $330 million Firmus raise from that period. The headline figure of $4.2 billion, which the sector reported as a record, includes Firmus's $2.85 billion raise in August and therefore overstates the underlying market.

The headline growth masks a narrower base. CTV's historical series shows 92 announced rounds last quarter compared with 123 a year earlier, a 25% decline, and funding excluding Firmus was essentially flat on the second quarter. CTV said in its commentary that "the headline jump in dollars should not be mistaken for a broad-based funding boom." Queensland-based cancer treatment developer AdvanCell's $452 million Series D alone made up 35% of the remaining capital, with most of that money coming from offshore. Without AdvanCell, the quarter's tally falls to roughly $858 million, about 18% above last year's total excluding Firmus. The ten largest non-Firmus rounds account for about $1.04 billion, or 79% of the remaining funding. Other large rounds included expat insurtech Cover Genius ($143 million), clinical AI startup Heidi's Series C ($140 million) and energy retailer Amber Electric's Series E ($79 million). Rounds below $10 million raised $162 million combined, broadly in line with the 2025 quarterly average.

AI was central to deal flow. AI applications attracted $675 million, roughly half of non-Firmus capital, and 65% of all announced rounds involved AI-first or AI-enabled companies. CTV's survey found that 81% of investors said AI-first startups commanded higher valuations than comparable non-AI businesses, with 42% reporting significantly higher prices. CTV characterised this as "an AI premium, not a wholesale repricing of the market." Specialist software captured 94% of software funding, and no surveyed investor preferred general-purpose software over products built for specific industries. Investor-reported weighted valuation averages for Series C and later businesses rose from $100 million to $225 million, though CTV noted these are survey estimates rather than measured transaction prices.

Female and mixed-founder teams raised $114 million, down 14% from $133 million a year earlier. Excluding Firmus in both periods, their share of capital fell from about 18% to 9%, even though they accounted for 32% of this quarter's deals. CTV said "participation improved faster than access to large cheques."

For venture fund investors, the survey data was less encouraging. According to the report, 65% of funds said their backers viewed venture less favourably than a year earlier, and 71% had recorded no fund exits in 2026.