Quarterly VC deals drop to five-year low

After a lively end to 2023, Australian startup deals fell to their lowest level in more than five years in Q1 2024, according to a report from Cut Through Capital.

The report was prepared using publicly available, validated equity funding data, with quarterly announced deals having dipped to just 66, or 58 deals excluding accelerator rounds.

The $703 million invested in Q1 deals topped the $661 million figure from Q1 2023 but was a significant fall from the over $1 billion in Q4 2023.

It must however be noted that Q1 deal processes usually kick off late in the previous year, meaning Q2 data would reveal whether 2024 had brought a transaction uptick compared to the last 18 months.

The count of deals under $5 million, $20 million, and $50 million also hit five-year lows.

Despite this, both average and median deal sizes from seed stage onwards saw large rises compared to a year ago.

Angel and pre-seed funding raised was down 52 per cent on the same time last year.

Climate tech saw the most deals made in Q1, with a total of nine deals equally $49 million, while Cybersecurity saw the highest dollar figure invested at combined $161 million from two deals.

Medtech had the second largest investment figure with $122 million from four deals.

The share of funding directed to all-female founding teams hit an all-time high in Q1, largely due to significant funding rounds for healthcare businesses Aravax, Prota Therapeutics, Ultra Violette and Solbari.

One third of startups funded in Q1 mentioned AI on their website.

The deal participation rate of startups with at least one female founder also reached all-time highs at pre-seed and series A stages.

Cybersecurity company Bugcrowd and HR-rostering software Deputy reached unicorn status, becoming the first Australian companies to reach the elusive $1 billion valuation since 2022.