Australia’s tech start-up scene stands at a crossroads, dealing with challenges to its growth and global competitiveness. But these same challenges are the very opportunities for transformative change: by leveraging strategic solutions and embracing innovative initiatives, the start-up ecosystem can be reinvigorated.
The decline in VC investment
One of the most pressing issues facing Australia’s tech start-ups is the precipitous drop in venture capital (VC) investment. According to a recent KPMG Private Enterprise Venture Pulse report, it shows a 53 per cent drop in total deal value in Australia, with global venture capital falling to $344 billion in 2022 from $531.4 billion in 2024 – the lowest level since 2019.
This decline presents a significant hurdle for aspiring entrepreneurs, as access to adequate funding is essential for scaling ventures and bringing innovative solutions to market.
To address the funding gap, Australia needs to incentivise investment from VC firms and investors. Initiatives such as Breakthrough Victoria, which supports breakthrough ideas and technologies to solve globally significant problems, play a crucial role in fostering innovation and driving investment in the tech sector. By aligning incentives with the goals of Breakthrough Victoria, we can unlock capital and propel Australia’s tech start-ups towards success.
How mentorship and support programs can fill the gaps
While countries like Singapore and Hong Kong prioritise the development of their tech ecosystems, Australia’s government support for start-ups is falling short. The lack of any strategic initiatives and little investment stifles the growth of start-ups and undermines our ability to compete on a global stage.
To overcome cultural barriers and risk aversion, mentorship and support programs need to be established to nurture entrepreneurial talent and foster a culture of innovation. Connecting aspiring founders with experienced industry professionals provides guidance, support, and inspiration to navigate the challenges of building a successful start-up.
Further supporting and strengthening Australia’s tech ecosystem
The scarcity of high-profile success stories within Australia’s tech ecosystem diminishes investor confidence and weakens the sector’s credibility. Without visible examples of achievement, aspiring entrepreneurs struggle to attract funding and support for their ventures.
Australia must celebrate and promote success stories within the tech sector to inspire confidence and attract investment. Highlighting the achievements of trailblazing entrepreneurs supported by initiatives like Breakthrough Victoria showcases Australia’s innovation potential and positions the country as a hub for technological advancement.
The full potential of Australia’s tech ecosystem is still to be unlocked: and turning the key demands a collective effort from all stakeholders – government, investors, industry leaders, and aspiring entrepreneurs.
