Published on the 16/04/2025 | Written by Heather Wright

Cleantech cleans up + 2025 off with hiss and roar…

The New Zealand and Australian startup scenes are showing recovery and growth, with total capital raised on the rise across both countries after a lean few years.

The NZ Growth Capital Partners’ Young Company Finance report shows continued post-pandemic recovery in New Zealand, with 146 deals completed to the tune of NZ$467 million – a 34 percent increase over 2023’s figures.

“The optimism is real – but fragile.”

The second half of the year proved strongest, with investment soaring 101 percent on the same period a year earlier, while deal numbers were up 29 percent. The dollar growth was driven by eight deals exceeding $10 million – four times the number seen in the second half of 2023.

That increased investment activity was primarily driven by early expansion/expansion stage deals, which surged to $271 million, more than doubling from the $121 million recorded a year earlier.

Across the year seed investment also saw strong growth, increasing from $63 million to $124 million and accounting for 45 percent of all transactions across the full year.

Also rebounding in the second half were new deals, more than doubling over the same period a year earlier to reach 30, while total investment in new deals hit $45 million in H2, up from just $20 million in the same period in 2023. While that’s good news, the share of new deals compared to follow-on deals remains below the historical average of 35 percent.

It’s a similar story in Australia where total capital raised in 2024 was enough to see the year ranked as the third highest on record, according to the State of Australian Startup Funding report by Cut Through Venture and Folklore Ventures.

It shows AU$4.0 billion in funding across 414 deals for the year. That’s an 11 percent increase in 2023’s funding, but a 12 percent decrease in the number of deals.

The size of the cheques being written was also up for pre-seed and seed deals, which reached a median of $1 million and $3 million respectively.

Cut Through Venture’s figures for the first three months of 2025 show this year has gotten off to the strongest opening seen since 2022, nearly AU$1 billion ($993 million to be precise) across 100 deals. (It should, however, be noted that the report covers the period prior to US president Trump’s ‘Liberation Day’ tariffs.)

‘AI-first’ companies topped the charts – the first time the sector has led the field.

“This is despite rumours of stealth SAFE notes running rife,” the Quarterly report says. “We believe the data likely underrepresents the true scale of early stage AI activity.”

Starups outside the traditional software-only categories dominated both deal volume and funding in Q1 2025, with sectors like biotech, climate tech and hardware collectively outpacing enterprise software.

Techboard’s Australian Startup Funding in Review 2024 report puts the figures for 2024 at $4.1 billion across 477 private investments.

And the biggest deals of the year in Australia for 2024? According to the State of Australian Startup Funding report Betashares’ AU$300 million raise in June takes top spot. The fintech’s funding came from Singapore’s Temasek, which acquired a minority stake in the business, with the funding expected to fuel ongoing growth both locally and internationally.

Cleantech Hyasta’s AU$172 million raise, led by bp Ventures and Templewater, garnered it second spot while Bugcrowd’s $156 million to help scale its AI-powered crowdsourced security platform offerings, nets it third spot.

Startup Genome valued New Zealand’s ecosystem at $9 billion across 2,400 startups in 2024. In comparison, the Sydney startup scene alone was worth US$72 billion with more than 3,000 startups.

In New Zealand, software startups saw a return to the sunshine days according to the figures for last year with investment rebounding – software accounted for 48 percent of all investment in H2 2024 and 46 percent across the year – a significant increase from the 27 percent of a year earlier.

Cleantech/climate-tech continued a steep upward trajectory, garnering $70 million in funding, up from $42 million in H2, accounting for 11 percent of all investment in H2 and equalling healthtech. Across the year cleantech and healthtech accounted for 28 percent of all deals, up from 26 percent in FY 2023, but their share of total investment was down to 33 percent from 48 percent.

That shift was driven by the surge in software startup investment.

The Kiwi report also notes that several notable transactions released capital back to early-stage investors in H2 2024. Those included investment into Kami by Boston Ventures, and the acquisition of Tradify by the Access Group.

This year has also seen notable acquisitions announced for Robotics Plus and Quantifi Photonics.

And while the 2024 State of Australian Startup Funding flagged concerns around the declining number of investors believing activity will increase in 2025 (down 16 percentage points to 51 percent) and the number of investors reporting a failed portfolio company (55 percent), the latest quarterly report paints a slightly rosier (pre-Liberation Day) picture, saying investor sentiment had improved ‘notably’ compared with 2024.

Most were reporting strong portfolio health and increased deal flow, with fewer shutdowns and layoffs reported and more teams prioritising new investments.

“However, concerns remain around global macroeconomic and sovereign risk factors including geopolitical instability and reliance on international funding,” the quarterly report says.

“The optimism is real – but fragile.”