Funding flux
The strong start to the year for Australian startup funding may be short-lived as Donald Trump's tariffs cause turbulence across the ecosystem.
What a difference a few weeks can make. On the face of it, the latest figures on funding for the Australian startup ecosystem make for upbeat reading, suggesting a turning point for the sector after a difficult few years. In the first three months of 2025, nearly $1 billion ($993 million to be precise) flowed into the sector across 100 deals, in the strongest opening to a year since the heady days of 2022.
But the latest report from Cut Through Venture (a side hustle of Five V's Chris Gillings) encompasses a period before Donald Trump’s ‘Liberation Day’ tariffs threw global markets into turmoil. What was once a reliable compass for the startup ecosystem now feels somewhat irrelevant in such a rapidly shifting landscape.
According to the report, science and deep tech startups grabbed the lion’s share of funding and deal count in the first three months of the year, an encouraging sign that the ecosystem is maturing and diversifying away from enterprise software. AI startups were another bright spot.
The problem is, deep tech and biotech startups developing and producing physical products are also far more exposed to blowback from the unfolding global trade war than your typical SaaS business.
