Funding levels for Australian Startups and Young Tech companies remained strong in FY2020

Despite COVID 19, funding for Australian Startups and Young Tech companies has remained strong with significant growth reported in private funding in the 2020 financial year. Peter Van Bruchem, co-founder and CEO of Techboard − which has been tracking funding of Startups and Young Technology companies since 2017 − provides insights from his organisation’s latest annual report.

During the early days of the economic contraction triggered by COVID-19, global reporting indicated significant slowdowns in venture capital (VC) funding, with falls recorded across China, Europe and the US in the third quarter or FY20.1 Techboard data has not shown the same contraction in Australia. While the number of recorded funding events dropped during the third quarter of the financial year, total funding appeared to plateau and then increase in the last quarter to its highest level ever recorded (excluding the $1.6bn PEXA (Property Exchange Australia) acquisition), with $2.4bn funded in the three months to June 2020.

However, the number of private deals at the lower end of the scale (sub $5mn) contracted during Q3 with a recovery in deals from $1-$5mn in Q4 and sub $1mn deals continuing to decline in Q4.

Total reported startup funding from all sources (private, public, grants, crowdfunding, accelerators and acquisitions) during the 2020 financial year was $6.9 bn. This total is in line with the previous year’s $6.8 bn, but almost double the $3.5 bn reported in FY18. Private investment levels, however, moved markedly from 2019 from $2.26bn to $4.48bn, with the number of private investments captured rising by 23% to 377 deals.

This is a strong performance for a year significantly impacted in its second half by a global pandemic and unfolding economic contraction. The Australian venture capital markets appear to have weathered the COVID-19 storm well – at least initially, though other funding sources (such as public markets) perhaps less well.

The funding data collected by Techboard over the past three years suggests a maturing of the startup and tech sector in Australia, with funding events generally getting larger as companies are maturing.

In particular, between FY18 and FY19 there was a marked uptick in funding events greater than $100mn, up 167% in quantity and 235% in value. Funding events of all sizes increased year-on-year between FY18 and FY19, with the exception of deals in the $5mn-$10mn range. From FY19 to FY20, funding events again increased year-on-year in all categories, including in the $100mn+ range when the PEXA acquisition is removed.

An increasing volume of $100m+ deals also suggests an increasing number of unicorns emerging on our shores. We look forward to this trend continuing in Australia, as high-profile success stories will attract more investors to the venture capital and angel investment asset classes.

On a per capita basis, Victoria had a strong FY19 ($352) but experienced minimal growth into FY20 ($356) while NSW grew strongly (up 115%) from FY19 ($229) while NSW fared better in FY20 ($492). In both cases fintech megadeals drove the high funding levels.

In Australia, funding of local startups sits around $271 per capita per annum. This takes an all-sources view of funding, and includes VC, angel, acquisitions, public markets and grants. Narrowing the view to only include private funding of startups, the figure is closer to $121 per capita. This compares to $604 in Israel and $412 in the US according to data published by StartupGenome.

Late last year StartupAUS’s Crossroads Report reported a worrying trend in angel and seed funding, with a continued decline in number of deals recorded from FY17 to FY19. This was based on data recorded by US-based data provider Pitchbook. Techboard data, which includes exclusive data sourced directly from Australian angel groups, paints a less worrying picture.

Private deals in the sub $1mn range have remained relatively stable over the past three years at just under 100 per year, and would likely have shown more of an increase in the last year were it not for the impact of COVID-19. Data collected from the major angel groups shows total funds deployed remained steady at circa $10 million in FY18 and FY19, but increased to $14 million in FY20, despite a drop off in activity in the last quarter following COVID-19.

Data on angel investment has been historically difficult to track because many seed stage deals remain confidential. While many high-net-worths invest independently, many angels join local angel groups in order to benefit from increased deal flow and peer support. As such, angel groups can provide some insight into the overall activity level of the asset class.

Click here to read the full report.


Techboard, founded by Peter van Bruchem and Rafael Kimberley-Bowen has been tracking funding of Australian Startups and Young Technology Companies since 2017. Itis a leading source for up-to-date data on the Australian startup and young technology company ecosystem. Techboard maintains three interlinked datasets which include a directory of more than 3,800 Australian startups and young technology companies, comprehensive funding and deal data and an Investor/funder dataset.

Techboard publishes free reports containing high level insights and provides subscription access to its company, deal and investor data and a recently updated platform and Funding Event Search Engine.