‘Increasing demand for sovereign capability’: Capital flows to hardware as SaaS era fades
Gilmour Space, Advanced Navigation and Neara crossed unicorn status in Q1 — none of them traditional SaaS.
Capital is back, but it is being spent on fewer companies, with greater conviction, and increasingly on ones building sovereign capability.
According to Cut Through Venture’s Q1 report, Australian startups raised $1.8 billion in the first three months of 2026, the strongest opening to a year since the 2022 peak.
But the headline masks a market that has narrowed even as it has grown. The top 10 deals accounted for nearly 60% of all capital raised — the highest concentration in seven years — and the very largest cheques skewed sharply toward companies building in atoms rather than bits.
Cut Through Venture founder Chris Gillings told Capital Brief the shift away from pure software wasn’t a one-quarter blip.
