Seventy-seven deals were announced in the third quarter of 2023, with total funding this year slightly outpacing 2020 – but still well below 2021 and 2022, Cut Through Venture’s Australian Venture Capital Funding Report reveals.
$739 million is the headline figure, with start-ups in Q3 banking this much from venture capital firms. That’s 9% less than what start-ups received in Q2 this year, and total funding across 2023 is less than half (42%) of what it was compared to the same time period in 2022.
Climate-tech and clean-tech start-ups dominated in funding and deal count, re-entering the top-five investor favourites after a post-2022 dip. Enterprise and business software start-ups were the top favourites, followed by AI/big data, hardware/robotics/IOT, and cyber/privacy start-ups. Rounding out the top 10 were fintech, deep-tech, ed-tech, dev-tech, and logistics/supply start-ups.
According to the report, climate-tech companies were the most funded, banking about $116 million in funding across 8 deals, followed e-commerce companies, which banked $107 million across 4 deals.
“The transition to net zero is the greatest economic challenge of our time and is rapidly disrupting business models, methods of collaboration, and the economics of comparative advantage,” Cut Through Partner, Deloitte, stated.
“Reaching a net-zero emission economy by 2050 will require new ways of thinking, working, investing, and collaborating. Requiring a collective annual investment of USD $9 trillion, the transition won’t come cheap – but with most of this investment being directed towards high growth sectors like climate tech, the economic opportunity is enormous.”
The climate-tech market is predicted to reach US$94.5 billion by 2029, at a CAGR of 24.5%.
Health and safety software start-up SafetyCulture, valued at more than $2.5 billion, banked the equal-most funding across the quarter, with a $34 million Series E round, tied with Lyre’s Spirit Co’s Series B round. Amp, Stockspot and Plotlogic rounded out the top 5.
Funding to female-only founder teams reached its highest percentage contribution since Q4, 2020, but funding share to female founders remains lower than the record-level set in 2020. Secure Code Warrior, Silicon Quantum Computing and Goterra secured 87% of the $152 million raised by female founders.
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