Australian Venture Capital Funding Report (CTV Summary)

Cut Through Venture (CTV), in partnership with Corrs, recently released its Australian Venture Capital Funding Report for Q3 2025. The report highlighted an increase in deal volume, despite fewer mega deals and a focus toward Hardware, BioTech and other science-based startups.

Key capital raising statistics

The Australian startup capital raising statistics in CTV's report show:

• A$1 billion was raised across 116 announced deals, making it the biggest quarter of 2025 by deal count (primarily lifted by increased accelerator activity);
• one mega-deal – Firmus Technologies' A$330 million raise – which involved investment from Nvidia and Ellerston. This fundraising accounted for a substantial share of total capital deployed. Firmus Technologies has since raised an additional A$500 million during Q4 2025 to bring the company's valuation to A$6 billion;
• valuations saw a notable uplift this quarter, with the most pronounced lift at Pre-Seed, Seed and Series A, whilst later stages were steadier, and AI-first companies continue to price at a premium;
• non-software startups received the most funding, with hardware featuring prominently alongside BioTech and other sciences, as investors favour unique IP pathways with credible regulatory or manufacturing plans; and
• funding to female founders showed mixed signals, with accelerator programmes doing much of the lifting for representation, with 33% involving a female founder, yet overall share of dollars to female-led and mixed teams fell to just 11% of total capital raised – the weakest outcome in six quarters.

Sector perspectives

In terms of sector specific data, the CTV report shows that for Q3 2025:

• startups that focused on Hardware, Robotics and the Internet of Things (IoT) dominated the quarter in both cheque size and deal volume with A$481 million raised across 12 deals;
• BioTech and MedTech ranked second in total funding and tied for first in deal volume at 12 deals, with Climate Tech and Clean Tech close behind;
• Artificial Intelligence (AI) held its position among the top five most funded sectors in Q3 2025, following its debut in the top five rankings in Q2 2025; and
• PropTech, RealTech, Construction and HealthTech all saw a notable rise in deal volume during Q3 2025, while FinTech recorded a sharp decline.

Investor sentiment and outlook

CTV's investor sentiment survey indicates that overall sentiment continues to be largely positive:

• 54% of investors said the funding market was more favourable compared to last quarter;
• only 7% of investors said the current state of the funding market is unfavourable (compared to 5% of investors in Q2 and 16% of investors in Q1);
• 76% of investors reported assessing the same or more deals this quarter compared to last quarter;
• 66% of investors rated the quality of deal flow as either good or excellent; and
• 54% of investors said they expected to do more deals this year compared to last year.

Positive investor sentiment rebounded from a blip in Q2 2025 where 30% of investors reported at least one company shutdown. In Q3 2025, the number of investors with at least one company shutdown dropped to 18%. This is a marked improvement over the previous quarter and closer to the rate experienced in Q1 2025.

Access the full CTV report.

New merger laws to impact Australian tech M&A transactions

CTV's recent report featured a Corrs article titled: 'New merger laws to impact Australian tech M&A transactions.'

Australia's new merger control regime, which commenced on a voluntary basis from 1 July 2025 and will become mandatory from 1 January 2026, marks a seismic shift from the current voluntary and informal process to a mandatory and suspensory system. The new framework, administered by the Australian Competition and Consumer Commission (ACCC), is more rigid, burdensome, and protracted, while capturing significantly more transactions than the previous regime.

As part of the reforms, the tech sector is expected to be particularly impacted, as the government and ACCC have previously expressed concerns about large tech companies making serial acquisitions that entrench market power and stifle innovation, including 'killer acquisitions' where larger players acquire start-ups before they can disrupt incumbents. The article highlights that under the new rules, global tech deals where the target has a relatively small Australian presence are now much more likely to require notification, with private equity and venture capital funds who are serial acquirers also being affected.

The key changes include:

• the new notification thresholds which are low and will capture more transactions, including those that raise no substantive competition issues (e.g. notification will be required for acquirers who have acquired businesses with an aggregate Australian turnover of A$10 million or more over the past three years);
• the framework extends beyond traditional M&A to include controlling interests in shares exceeding monetary thresholds, which may capture some venture capital deals and certain debt finance transactions, including convertible notes; and
• a broader geographic reach applies requiring only that the target is 'carrying on business' in Australia, which can be satisfied with very few customers, users or suppliers in the country.

The new framework will change the way advisers structure M&A deal processes, given most deals will take longer and be more public. Under the previous regime, around 90% of notifications were cleared on a confidential basis. Now, there is no confidential ACCC review process, with summary notices published on the ACCC website within a day of notification.

The new regime also shifts more regulatory risk onto sellers on the basis that more deals will be conditional upon ACCC clearance. Therefore, sellers will increasingly look to risk allocation mechanisms such as reverse break fees, non-refundable deposits and 'hell or high water' provisions. Buyers on the other side will be seeking increased access to information from sellers, which will require enhanced competition law protocols.

Read the full Corrs article on page nine of the CTV Report.

SaaS Summit overview

Corrs recently partnered with Five V Venture Capital, Stripe and Rampersand to host the SaaS Summit at Corrs's Melbourne office – bringing together founders, SaaS leaders and investors to explore the intersection of innovation and investment in Australia's thriving SaaS ecosystem.

Chris Gillings from Five V Capital hosted the event and shared some key insights from the SaaS Summit which we have included below, together with our own takeaways.

The afternoon featured panel discussions on topics ranging from a fireside chat with Netwealth's CEO Matt Heine to navigating hypergrowth, international expansion, and fundraising strategies. Panellists included industry leaders from Netwealth, Rampersand, Culture Amp, Cake, Corrs, Platform Advisory Partners, Stripe, Banyan Software and Seek Investments.

Key takeaways for founders

• Alignment is everything: High-growth teams scale by staying efficient and sharp – this means staying close to customers, building a learning culture and regularly reviewing whether your 'rituals' still serve their purpose. During hypergrowth, alignment between product development and sales teams is critical. Whilst sales teams focus on short-term revenue, product teams maintain long-term vision—creating separate but contextually aligned roadmaps for each function is crucial. Regular cross-functional communication ensures both teams work towards shared company objectives without compromising their distinct priorities. The key is creating systems that allow each function to operate at their optimal pace whilst maintaining strategic coherence.
• Cut through the noise: Don't let a vocal minority drive reactionary decisions. Founders must differentiate between market 'noise' and genuine shifts by gathering data from customers and sales teams on the ground. This requires discipline—resisting the urge to pivot based on isolated feedback and instead identifying patterns that signal real market movements. Build feedback loops that capture quantitative and qualitative insights, then analyse trends rather than reacting to individual data points.
• International expansion done right: Treat overseas expansion like launching a new startup: hire local 'founders' who understand the market, adapt your product to local needs, build partnerships with local providers, and structure compliance, tax and payments around local customs rather than forcing a foreign model into a new jurisdiction. Success requires patience and genuine localisation, not just translation. Consider the regulatory environment, payment preferences, and customer expectations that may differ significantly from your home market.
• Build vs buy: With AI capabilities now available off-the-shelf, assess when to build unique in-house capabilities versus partnering externally to use resources more efficiently. Focus your engineering talent on building genuine competitive advantages rather than recreating commoditised solutions. This strategic choice can significantly impact your burn rate and time to market.
• Prepare early for fundraising and M&A: Clean governance documents, clear IP ownership and strong shareholder communications should be established early—not discovered as issues during due diligence. Founders should understand how different types of investors and acquirers value deals, be ready to stand behind your financial projections, and ensure commercial and legal alignment on earnout structures. The best deals happen when founders have their house in order well before entering negotiations, allowing them to focus on strategic fit rather than scrambling to fix foundational issues. Engaging with advisers early can be crucial in navigating and avoiding such pitfalls.

Looking ahead

Australia's SaaS ecosystem is maturing rapidly. The SaaS Summit demonstrated that Australian founders are building world-class companies by combining global ambition with disciplined execution. The insights shared reflect a maturing ecosystem ready for its next phase of growth.

If you are interested in attending any future events, please reach out to a member of the Corrs team.

AI-washing and cyber-washing: key legal and regulatory enforcement risks for Australian organisations

As artificial intelligence (AI) and cybersecurity become central to business operations, Australian organisations highlighting their digital capabilities face significant legal risks when exaggerating or misrepresenting these capabilities – practices known as 'AI-washing' and 'cyber-washing'. Such practices may breach Australian Consumer Law (ACL) and attract financial penalties.

What does AI-washing and cyber-washing mean?

• AI-washing includes claiming services are AI-powered when they rely on manual processes, misrepresenting chatbots that use simple keyword matching as AI-driven, or exaggerating how operational an AI solution actually is.
• Cyber-washing involves making unsubstantiated claims about cybersecurity expertise or technology, failing to implement promised data protection measures, or misrepresenting data breach causes.

Regulatory landscape

Australia currently has no AI-specific legislation, leaving businesses subject to existing regulatory regimes. While the Government published a Voluntary AI Safety Standard in September 2024 and proposed mandatory guardrails for high-risk AI, the Productivity Commission has since called for a pause on mandatory regulations, warning they could stifle AI development.

Financial exposure

The ACL contains technology-neutral prohibitions on engaging in misleading or deceptive conduct or conduct that is likely to mislead or deceive in trade or commerce and making false or misleading representations about goods or services. Under the ACL, making false or misleading representations about technological capabilities can attract penalties of up to A$50 million, three times the value obtained from a breach, or 30% of adjusted turnover during the breach period. For example, AI chatbots producing 'hallucinations' containing false information about consumer rights or warranties could breach the ACL.

In October 2024, the Australian Securities and Investments Commission (ASIC) announced the publication of a report entitled Beware the gap: Governance arrangements in the face of AI innovation, which reviewed how 23 Australian Financial Services licensee and credit licensees use and plan to use AI. The report found governance gaps in how financial services licensees manage AI risks, encouraging specific policies for privacy, security, and data quality, plus proactive assessment of algorithm bias—an issue that has previously resulted in significant penalties.

Key takeaways for founders

Australian companies should always make accurate claims genuinely reflecting AI use levels—not hide manual processes running behind 'AI' services—and use clear language avoiding technical jargon that confuses consumers. Despite a lack of Australian AI-specific legislation, US precedents show regulators charging companies for exaggerating AI use in marketing and failing to disclose human intervention requirements—likely foreshadowing Australian enforcement trends.

With regulators increasingly concerned about generative AI risks, businesses must take care in ensuring they clearly understand their AI programs' actual operation to ensure consumer-facing statements are accurate and truthful.

Read the full Corrs insight article on the risks associated with AI-washing and cyber-washing.

Australian Tech M&A activity

Based on Platform Advisory Partners' analysis of Australia and New Zealand (ANZ) technology M&A deals, deal volumes experienced a modest decrease through Q3 2025 compared to Q1 and Q2, but median valuations climbed more significantly, signalling selective competition for higher-quality assets.

The uplift in pricing reflects relative confidence among buyers – particularly offshore strategics and sponsors – who continue to view ANZ technology assets as attractively valued relative to global peers. This has resulted in a continued trend of ASX-listed technology companies being taken private by offshore acquirers, illustrated by the below take-privates occurring in Q3:

• US-based CoStar Group acquiring Domain Holdings for A$2.65 billion;
• Japan-based MIXI acquiring Pointsbet for A$290 million; and
• UK-based Ideagen acquiring Envirosuite for A$130 million via financial sponsor Hg.

Given the ASX Information Technology Index has recently experienced a moderate pull-back while US tech indexes continue to trade up, conditions are favourable for this trend to continue.

Separately, we expect an uptick of M&A activity in Q4 2025 as dealmakers scurry to close transactions before the new ACCC merger reform regime comes into effect on 1 January 2026.

Platform Advisory Partners is a Melbourne based advisory firm specialising in providing M&A and capital raising advisory services to high-growth and technology companies.

About Corrs

Corrs is a leading Australian independent law firm, with a cross-disciplinary team which has a deep understanding of the needs of startups and high growth companies. We act for both startups and a range of investors, including local and international venture capital funds, strategic investors and universities.

Some examples of venture capital and technology deals we've acted on over the past 12 months include advising CoAct Capital on its investment in EatClub, At One Ventures on its investments in Provectus Algae and Relectrify, Gates Frontier on its investment in Koloma Australia, Stake on its A$90 million capital raise, Five V on its investments in Attekus and iBreadcrumb, Macquarie on its investment in Next Payments, Arrowroot Capital in relation to the sale of HammerTech to Riverwood Capital, GoPro on its acquisition of Forcite Helmet Systems, realestate.com.au on its acquisition of Realtair and Synechron on its acquisition of iGreenData Pty Ltd. Corrs has also recently advised Burda Principal Investments on their investment in biomaterials start-up Uluu and Coinbase on the tax and employment matters associated with their investment in Echo.

Corrs has also developed CorrsEdge, a cutting-edge online platform which gives startups the legal support they need at the early stage of their growth cycle. The platform offers access to over 30 intelligent legal documents with dynamic automation capabilities which enables users to generate bespoke documents and tailor them for their business. The Corrs Edge platform saves time and money, allowing startups to ensure that they have high quality legal documents without the typical costs of using a top tier law firm.

This publication does not constitute legal advice and should not be relied on as such. You should seek individualised advice about your specific circumstances.