AUSTRALIA is emerging as one of the most capital-efficient startup ecosystems in the world, according to the newly-released Australia Venture and Startup Report 2025.

The report published by local venture fund, Side Stage Ventures, with support from business analytics firm Dealroom and global data specialists Amazon Web Services, reveals that Australia leads globally in ‘unicorn’ creation per dollar invested. Unicorns are startup private companies that develop to achieve a value exceeding US$1 billion.

The inaugural Australia Venture and Startup Report benchmarks Australia’s venture and startup ecosystem against leading global hubs and reveals that while Australia leads the world in unicorn creation per dollar invested, it does so at a fraction of the investment capital seen in markets such as the US and Europe. 

The report credits this efficiency to Australia’s ambitious, resourceful and globally-minded founders, who have built global successes such as Canva, Atlassian and Afterpay. It also points to a maturing ecosystem with a robust pipeline of venture-scale companies emerging due to favourable conditions such as education, research and development and talent. 

“Australia has long been underestimated as a startup hub, but this report confirms what we’ve known for some time: the Australian startup ecosystem is quietly emerging as one of the most compelling yet undercapitalised ecosystems in the world,” Side Stage Ventures co-founder and general partner Ben Grabiner said.

“The data tells a powerful story. Despite just a fraction of the venture capital deployed compared to its peers, Australia has produced some of the best and biggest technology companies outside of the US and China – and it has the highest unicorn efficiency ratio of any country anywhere. 

“We hope this report helps shine a light on how far we have come,” he said.  

Australia is #1 in unicorns created

The overriding theme of the report is that Australia has already become a world leader in creating business unicorns. Australia ranks first globally for unicorns created per venture capital (VC) dollar invested, with 1.22 unicorns generated for every US$1 billion invested. Despite limited mergers and acquisitions (M&A) activity globally, Australia ranks eighth globally for VC-backed exit value since 2020 at US$63 billion.

Big outcomes from less capital

Despite raising less than US$34 billion in total VC funding since 2000, Australia ranks fifth in the world for the creation of companies that achieve a value of US$10 billion. In the jargon of the sector, these are known as ‘decacorns’. With six decacorns – namely Canva, Atlassian, Afterpay, Wisetech Global, AirTrunk and the REA Group – Australia is behind only the US, China, the UK and Israel in decacorns created.

Australia has second-fastest growing ecosystem globally

Australia’s combined startup and early-stage ecosystem value has grown 6.5 times since 2018 and 2.5 times since 2020 to reach US$360 billion. This makes Australia the second-fastest growing venture ecosystem globally.

Australia falls down on ‘seed funding’

The seed funding stage of startup development remains undercapitalised and reliant on overseas investors. This is an ongoing problem for Australia. Fewer than 30 active seed funds completed five or more deals in the past year, far behind peer markets like the US (601) and Europe (525). Further to that, just 61 percent of early-stage funding is locally sourced, compared with 73 percent in Europe and 80 percent in the US.

Can Australia capitalise on new frontier sectors emerging?

Investor appetite is moving away from enterprise software and financial technologies (fintech) and toward fast-growing opportunities in energy, health and media. Fortunately, these are the sectors in which Australia is gaining momentum.

There has been a ‘buzz’ around Australia’s startup success record for many years – but this is the first time the research has delivered clear evidence and an insight into the broad strengths – and distinct weaknesses – of Australia’s startup and early-stage business development ecosystem.

“It’s time we realise the opportunity that is upon us,” Mr Grabiner said.

“Australia now has a chance to grasp the moment and cement its position as a true world leader in producing exceptional global technology companies.”

Yoram Wijngaarde, the founder and CEO of Dealroom said, “The Australian tech ecosystem is one of the fastest growing in the world, and also one of the most efficient in creating outsized outcomes, the data shows. That’s a pretty compelling combination.

“It’s been exciting to watch the Australian tech ecosystem come of age in the last five years.

“The combination of major tech success stories, engaged regional and national policy makers, and growth momentum means the ecosystem is reaching a level of completeness and critical mass. The numbers show the efforts are already paying off, and it’s a perfect base from which to build a top international tech ecosystem.”

Download the complete Australia Venture and Startup Report 2025 at www.sidestage.vc/outliers-report-2025.

www.sidestage.vc

www.dealroom.co

www.aws.amazon.com/startups

ends