Liam Carter
October 12, 2026
13 min read
Australian startups closed out 2025 with their strongest run of fundraising since the 2021 boom, and the numbers landed in a tight cluster rather than a single tidy figure. Depending on which tracker you read, local founders pulled in somewhere between $5.1 billion and $5.48 billion across 390 announced deals, a jump that several reports peg at 24% year-on-year while others put it closer to 31%. The discrepancy matters less than the trend underneath it: Australian founders, including a growing slice of coding-tools and developer-infrastructure startups, are now routinely crossing the Pacific or the Atlantic for capital rather than waiting on local cheques.
That shift is visible in two very different deals from the past few months. Melbourne’s Buildkite, a continuous-integration and software-release platform used by OpenAI, Anthropic, Canva, Uber, Airbnb and Cursor, took a $21 million convertible note in January after a rocky year of rising cash burn and a leadership change. Around the same time, Sydney-based Dam Secure, which hunts for security flaws in AI-generated code, raised US$4 million (about A$6.1 million) in a seed round led by Washington DC’s Paladin Capital Group. Neither deal is enormous next to the mega-rounds dominating national headlines, but together they show how the “look offshore” pattern has reached deep into the coding-tools segment, not just the fintech and AI-infrastructure giants that usually get the attention.
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Australian Startup Funding Hits a Multi-Year High
The headline figure for 2025 is impressive by any recent measure. Industry research from Cut Through Venture and Folklore Ventures found Australian startups raised $5.1 billion across 390 deals in 2025, a 24% increase from 2024 and the third-largest funding year on record, a milestone <a href="https://investmentcouncil.com.au/site/site/Insights/Member-Content/Australian-Startup-Funding-2025.aspx” rel=”nofollow noopener” target=”_blank”>cited by the Australian Investment Council. Chris Gillings, founder of Cut Through Venture and managing director at Five V Capital, framed the back half of the year in stark terms: “2025 finished with a bang, delivering one of the strongest quarters of funding announcements since 2021 and signalling that confidence has returned to Australian venture capital,” he said, in comments reported by Capital Brief.
Not every tracker lands on the same total. Cut Through Venture’s own site badges the 2025 figure at $5.4 billion, while a separate breakdown published by ScaleSuite puts the number at $5.48 billion across the same 390 deals. The gap likely comes down to cut-off dates, currency conversion and how each firm treats convertible notes and undisclosed raises, but the direction is unambiguous across every version: 2025 was the best year for Australian startup funding since the pandemic-era peak, and the composition of that capital looked different from anything seen in the previous cycle.
What makes the recovery notable is where the growth came from. Reports indicate Australian founders pursued both local and international investors in 59% of 2025 deals, sought only overseas backers in 11% of cases, and relied solely on domestic capital in just 30%. That means roughly seven in every ten funded Australian startups now have at least one offshore name on their cap table, a structural change from the mostly local-money market of five years ago.
International Capital Becomes the Default, Not the Exception
According to Cut Through Venture and Folklore Ventures, international investors participated in 66% of Australian startup funding deals in 2025, up from 57% in 2024. That nine-point swing in a single year is one of the sharpest shifts the local venture market has recorded, and it lines up with what founders and bankers have been saying anecdotally for months: the pool of large local cheques simply has not kept pace with the size of rounds Australian companies now want to raise.
The same research found that startups built around artificial intelligence captured 61% of all Australian startup capital in 2025, equivalent to roughly $3.1 billion. That concentration explains a lot about why offshore capital flowed in so heavily this year. US and Asian investors have been deploying aggressively into AI-adjacent software, and Australian AI, fintech and biotech companies offering global addressable markets have been the natural beneficiaries. It also explains why the 20 largest Australian startup funding deals accounted for 58% of all capital raised in 2025, a concentration ratio that puts enormous weight on a small number of marquee rounds rather than a broad base of mid-sized raises.
Why Founders Are Choosing to Look Offshore
Reports on the 2025 funding cycle point to a consistent set of reasons founders give for courting overseas money even when local investors are available. Larger cheque sizes top the list: offshore growth funds and strategic investors in the US routinely write Series C and D rounds well beyond what most Australian venture funds can underwrite alone. Deeper follow-on capacity is the second factor, since international funds tend to reserve larger pools for subsequent rounds, reducing the risk that a startup runs out of local backers once it scales past Series B.
Support for global expansion is the third reason cited, particularly for companies whose customers are mostly outside Australia already. A US or European lead investor can open doors to enterprise customers, hiring networks and follow-on investors in ways a Sydney or Melbourne-based fund cannot easily replicate. The fourth factor is more blunt: founders report more favourable valuation and deal terms from offshore investors competing for access to a smaller pool of high-growth Australian companies, compared with a tighter local market where the same handful of funds see every serious deal.
Coding Tools Feel the Same Pull: Buildkite’s Convertible Note
Nowhere is the offshore-capital story more concrete than in Australia’s small but increasingly important coding-tools sector. Buildkite, the Melbourne-founded continuous-integration and software-release platform, raised $21 million through a convertible note in January, a deal that only became public in September when it surfaced in a wider roundup of Australian startup funding, according to a report from Capital Brief. The company builds infrastructure that lets development teams run builds and test releases on their own servers rather than a vendor’s cloud, placing it squarely in the CI/CD and developer-infrastructure category that has become one of the busiest corners of enterprise software.
Capital Brief’s reporting, drawn from ASIC filings, shows Buildkite ended its 2025 financial year holding approximately $10.1 million in cash, down sharply from $33.7 million a year earlier. That kind of cash burn typically precedes either a down round or a bridge financing, and Buildkite went with the latter: a convertible note rather than a conventional priced equity round, a structure that lets both the company and its investors defer agreeing on a valuation until a later, hopefully stronger, funding event. The note followed a leadership change at the company, with co-founder Keith Pitt stepping down as chief executive after more than a decade running it.
A Customer List That Reads Like an AI Who’s Who
What makes Buildkite’s situation interesting rather than simply distressed is its customer base. Capital Brief’s report names OpenAI, Anthropic, Canva, Uber, Airbnb and Cursor among the companies relying on Buildkite’s infrastructure, a list that puts a small Melbourne company at the centre of the AI coding boom even as its own balance sheet tightened. The company’s last previously disclosed funding was a US$21 million Series B in 2022, co-led by Australian investors AirTree and OneVentures, meaning the January note represents its first fresh capital in roughly three years and its first since AI coding assistants became mainstream enterprise tools.
Dam Secure and the Rise of AI Code Security Funding
A second, smaller deal illustrates the same offshore pattern from the opposite direction: a startup seeking out foreign capital from day one rather than exhausting local options first. Dam Secure, an Australian startup focused on security risks created by AI-generated code entering production, raised US$4 million, or roughly $6.1 million, in a January seed round led by Paladin Capital Group, a Washington DC-based cybersecurity and AI investor, according to reporting from Forbes Australia and Smart Company.
Dam Secure has said it will use the new capital to grow its Australian research and development team to 13 people while establishing a US sales and marketing presence, a dual-track plan that captures the broader trend in miniature: raise overseas, but keep the engineering base at home. The round sits at the intersection of two categories the fact sheet’s broader funding data shows were already hot in 2025 – AI and cybersecurity – and the involvement of a US-based lead investor rather than an Australian fund is exactly the kind of case that pushed the international-participation rate from 57% to 66% in a single year.
The Mega-Deals Still Dominate the Ledger
Buildkite and Dam Secure are useful case studies precisely because they are modest next to the five or six rounds that defined 2025’s headline total. Reports place Firmus Technologies at the top of the list with raises of $500 million and $330 million during the year, figures that help explain why the company has separately pursued an ASX listing push. Airwallex, the cross-border payments company, closed a $498 million Series G and a $232 million Series F. Synchron, the brain-computer interface company, closed a $303 million Series D. Harrison.ai, the medical imaging AI company, raised $179 million in a Series C, and AdvanCell, a radiopharmaceutical company, closed a $177 million Series C.
None of those five companies are coding-tools businesses in the strict sense, but their presence at the top of the ledger is exactly why the 20-largest-deals-equal-58%-of-capital statistic matters so much for smaller software companies. When a handful of nine and ten-figure rounds absorb most of the available capital and investor attention, mid-sized developer-tools and AI-infrastructure startups like Buildkite are left competing for whatever is left over, which helps explain why a profitable-adjacent, globally used platform ended up taking a convertible note instead of a priced round.
Local, International or Both: How Founders Split Their Cap Tables
The 59/11/30 split between blended, international-only and local-only funding sources is worth sitting with for a moment, because it undercuts the simplest version of the “founders flee offshore” narrative. A plurality of founders are not abandoning local investors; they are adding international ones to existing domestic relationships. Only 11% of deals involved exclusively overseas capital, suggesting most Australian startups still value having at least one local name on the register, whether for board experience, local market knowledge or simply the practical benefit of a nearby investor during a crisis.
Still, the 30% of deals that remained purely local-only in 2025 represents the smallest share of that category in recent memory, based on the trend direction in the broader Cut Through Venture and Folklore Ventures dataset. A newsletter from Women’s Agenda highlighted the human side of that pattern this year, documenting the case of a taxpayer-backed AI startup that ultimately relocated offshore even as some of its own female founders pushed to keep the company anchored in Australia, a tension that captures how individual, non-financial factors interact with the straightforward economics of larger cheques and deeper follow-on pools.
Market Impact for Australia’s Software and Coding-Tools Sector
For Australia’s broader technology sector, a record funding year carries a mixed signal. On one hand, the 24% to 31% growth in total capital deployed shows institutional confidence returning after a difficult 2023 and 2024, when global rate rises pushed venture capital into a defensive posture everywhere, Australia included. By contrast, the concentration of that capital in nine-figure AI, fintech and medtech rounds means the median Australian software startup, including most coding-tools and developer-infrastructure companies, is not necessarily feeling the recovery directly.
Buildkite’s convertible note is the clearest illustration available right now. A company with a globally recognised customer list, including some of the most valuable AI companies on the planet, still had to accept a bridge-style financing instrument rather than a straightforward priced round, after watching its cash balance fall by roughly two-thirds in a single year. That is not necessarily a sign of a failing business, since convertible notes are a common and often sensible tool for companies between growth stages, but it does suggest that even well-positioned Australian coding-tools companies are not immune to the cautious, concentrated capital environment sitting beneath the record headline totals.
Historical Context: How 2025 Compares With Past Australian Funding Cycles
Australian venture funding peaked during the 2021 boom, when ultra-low interest rates and a flood of global liquidity pushed valuations and deal volumes to levels the market has not matched since. The subsequent correction through 2022 and 2023 hit Australian startups particularly hard, as local funds pulled back and offshore investors, many of whom had entered the market opportunistically during the boom, retreated to their home markets first. 2024 was widely described across the venture press as a stabilisation year rather than a recovery year.
Against that backdrop, Cut Through Venture and Folklore Ventures describing 2025 as the third-largest funding year on record is a meaningful marker, placing it behind only the 2021 peak and one other standout year in the firm’s historical dataset. What is different this time, compared with 2021, is the investor mix. The 2021 boom was driven substantially by growth-stage funds chasing momentum across every market simultaneously. The 2025 recovery looks more selective, concentrated in AI, fintech, medtech and a short list of mega-rounds, with international capital acting less like opportunistic tourism and more like a structural feature of how larger Australian rounds now get done.
Competitive Comparison: Australia’s Coding-Tools Funding Against the Region
Measured against comparable developer-tools and CI/CD companies elsewhere, Buildkite’s $21 million convertible note is a modest sum. US-based rivals in the continuous-integration and software-delivery space have historically raised Series C and D rounds well into the hundreds of millions when scaling into enterprise accounts, reflecting both a larger domestic venture pool and closer proximity to the Silicon Valley customers that make up much of the AI coding tools demand curve. Dam Secure’s seed round, by contrast, is roughly in line with early-stage AI security raises seen elsewhere, suggesting the seed-stage gap between Australian and offshore coding-adjacent startups is narrower than the gap at growth stage.
The Growth-Stage Funding Gap
That growth-stage gap is the real story behind the 66% international-participation figure. It is not that Australian coding-tools startups cannot find seed or Series A capital domestically; it is that once a company needs a $50 million-plus round to compete globally, the local market increasingly cannot supply it alone, forcing founders toward the US-based funds and strategics that already dominate the global AI coding tools landscape.
Predictions: What 2026 Looks Like for Australian Coding-Tools Funding
Several trends from the 2025 data point toward how the next twelve months are likely to unfold for Australian coding-tools and developer-infrastructure startups specifically.
- International participation in Australian deals is likely to climb past 66% in 2026 if AI-related capital keeps flowing at anything close to its 2025 pace, since AI and developer-infrastructure startups are exactly the category drawing the most offshore interest.
- Convertible notes and bridge financings, like Buildkite’s, are likely to become more common among mid-sized Australian software companies caught between the concentrated mega-rounds at the top of the market and tighter seed-stage checks at the bottom.
- More Australian AI-code-security startups are likely to follow Dam Secure’s pattern of raising from US-based specialist investors first, rather than building a domestic round before looking overseas, given how thin the local pool of dedicated cybersecurity-focused funds remains.
- The gap between the different reported 2025 totals ($5.1 billion versus $5.48 billion) will probably persist into 2026 reporting, since trackers continue to differ on how they treat convertible notes, undisclosed rounds and currency conversion.
- Expect continued founder commentary, in the vein of the Women’s Agenda reporting on relocation pressure, about the tension between taking offshore capital and keeping engineering and leadership teams based in Australia, particularly for AI-driven companies with global ambitions.
What Founders and Investors Should Watch Next
For founders building in the coding-tools and developer-infrastructure space, the practical takeaway from 2025 is that the path to growth capital increasingly runs through international investors, even for companies with strong Australian roots and globally recognised products. Buildkite’s customer list, which reportedly includes OpenAI, Anthropic and Cursor, demonstrates that proximity to the AI boom does not automatically translate into easy access to large local rounds. Founders planning a Series B or later should expect to budget time for US-based investor conversations well before the round opens, rather than treating offshore capital as a fallback if local options fall through.
For local venture funds, the 30% local-only share is a number worth tracking closely over the next few reporting cycles. If that figure keeps shrinking, it suggests Australian funds are being squeezed out of larger rounds entirely rather than simply co-investing alongside international partners, a dynamic that would have longer-term implications for how much influence domestic capital retains over the direction of the country’s software and AI sectors.
Frequently Asked Questions
How much did Australian startups raise in 2025?
Reports vary between $5.1 billion and $5.48 billion across 390 announced deals, depending on the tracker. Cut Through Venture and Folklore Ventures put the figure at $5.1 billion in comments cited by the Australian Investment Council, while a separate ScaleSuite breakdown lists $5.48 billion for the same 390 deals.
Why are Australian coding-tools startups raising money offshore?
Reports point to larger cheque sizes, deeper follow-on capital, support for global expansion and more favourable valuation terms from international investors, particularly for AI-related and developer-infrastructure companies with global customer bases.
What did Buildkite raise and why?
The Melbourne-based CI/CD company raised $21 million through a convertible note in January, a deal reported publicly in September. It followed a year of rising cash burn, a drop in cash reserves from roughly $33.7 million to $10.1 million, and the departure of co-founder Keith Pitt as chief executive, according to Capital Brief’s reporting on ASIC filings.
Who are Buildkite’s customers?
Capital Brief’s report names OpenAI, Anthropic, Canva, Uber, Airbnb and Cursor among the companies using Buildkite’s software-release infrastructure.
What does Dam Secure do and who funded it?
Dam Secure is an Australian startup focused on security risks in AI-generated code. It raised US$4 million, roughly $6.1 million, in a January seed round led by Paladin Capital Group, a Washington DC-based cybersecurity and AI investor
What share of 2025 Australian startup deals involved international investors?
Sixty-six per cent of 2025 deals included at least one international investor, up from 57% in 2024
How concentrated was 2025 funding among the biggest deals?
The 20 largest Australian startup funding deals accounted for 58% of all capital raised in 2025, reflecting a market where a small number of mega-rounds, including those involving Firmus Technologies, Airwallex and Synchron, dominate the total.
Is this the biggest funding year on record for Australian startups?
No. Cut Through Venture and Folklore Ventures describe 2025 as the third-largest funding year on record, behind the 2021 boom and one other peak year in their historical dataset.
