G’day and welcome to your weekly edition of Overnight Success - your download on all the important things that have happened in the Aussie startup ecosystem. 🚀
Two notes of housekeeping before we get stuck in!
Thank you to everyone who attended the charity trivia night during the week. We had a great time, and the evening helped me reach my fundraising goal for Forever Projects. Check out the photos from the night here!
I’m also heading off this afternoon to climb Mt Kilimanjaro and wont be writing next week’s newsletter, so OS will be taking a week off! The week following will likely hit your inbox on Monday morning, the 28th.
👀 Headlines 👀
📉 According to the latest Cut Through numbers, start-up funding hits 18-month low: Australian start-ups raised $812 million across 76 deals in Q2 2025, down 18 per cent QoQ and 47 per cent YoY. (Full report here)
A big cause of the drop was the drying up of megadeals, with only eight deals topping $20 million; Airwallex led with $232 million, followed by RayGen’s $75 million and Amber Electric’s $45 million.
Female founders suffer record-low backing, with all-female teams securing less than 0.5 per cent of Q2 funding; just 11 deals involved a woman founder, with only $29 million to mixed-gender teams (excluding Lucy Liu, co-founder of Airwallex). (SmartCompany has more)
Regardless, H1 2025 is on par with last year, equating to a total of $1.8 billion raised in the first six months, matching H1 2023 but 20 per cent below H1 2024.
On a positive note, the speed at which early-stage deals are closing has sped up, with pre-seed rounds reportedly closing within weeks. This may be due to the rise in the quality of startups in the new era of AI.
What has also changed is that the median level of ARR a startup generates at the Series A stage has increased drastically in comparison to even a year earlier. This suggests that the bar a company needs to secure funding has risen dramatically in the last 12 months. Numbers produced by Carta for US-based startups show that the median stage company has seen an 8.6% lift in valuation but a 114.8% increase in ARR compared to 2021. Niki Scevak, partner at Blackbird, confirmed that these numbers are comparable to those of Australian startups via his tweet.
🐼 HungryPanda scores $24.6 million judgment against Easi, the Melbourne-based delivery startup it acquired. (AFR)
A London court orders Melbourne-based delivery start-up Easi to pay nearly A$25 million in damages after breach of the asset-purchase agreement.
According to the lawsuit, an Easi employee deleted over 42,000 emails and 95,000 files during the agreed handover week, prompting fraud claims.
Evidence suggests Easi’s former owners quietly backed Fantuan Australia to compete, using misappropriated platform data.
Founded in 2014, Easi grew to 1.5 million users and 25,000 couriers before selling to HungryPanda for ~A$50 million in 2022.
🦅 Brisbane-based Swyftx acquires boutique US-focused crypto brokerage Caleb & Brown in a deal worth over US$100 million, touted as the largest crypto acquisition in ANZ history. (Startup Daily)
This deal gives Swyftx access to ultra-high-net-worth investors. Caleb & Brown offers one-to-one service for wealthy US clients, bringing A$2 billion in assets under custody and a presence in both Australia and the United States.
The acquisition extends Swyftx’s reach beyond Australia and New Zealand into the US and South Africa.
Since launching in 2018, Swyftx has doubled its customer base to over 1.2 million. Earlier this year, it announced plans to buy Easy Crypto, New Zealand’s largest exchange. The Swyftx group now employs about 300 staff.
In 2022, Swyftx explored a merger with Superhero, which ultimately resulted in a management buyout. This shows the team's interest in strategic partnerships to grow.
🏛️ Breakthrough Victoria trimmed 40% of its headcount from 52 to 32 over two years. (AFR)
State budget cuts have altered its funding. It now has a $1.68 billion runway for 15 years, down from the original promise of $2 billion over 10 years.
Despite these changes, Breakthrough Victoria is the most active VC fund in Victoria. It holds 36 direct investments, backs seven funds, and has committed $480 million ($355 million deployed).
The fund's Internal Rate of Return (IRR) is 3%. This is low but matches the performance of global 2021-vintage funds still recovering from the tech downturn.
Breakthrough Victoria's portfolio includes stakes in companies like RayGen, Quantum Brilliance, Samsara Eco, Amber Electric, and Kite Magnetics.
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⚡ Startup Retro ⚡
Diraq lands $15M on quest to build its first quantum-computing chip
Founder: Andrew Dzurak
Diraq has quietly closed an A$15 million equity round, drawing new support from Singapore’s ICM Global Funds ($4.6 million) and North Carolina’s Morgan Creek Digital ($768,000), alongside return backing from Main Sequence, Uniseed, NewSouth Innovations and France’s Quantonation. Founded in 2022 by Andrew Dzurak, the Sydney-based outfit is racing to ship its first quantum-computing chip by 2029, on track for a fault-tolerant machine by 2033.
The startup’s silicon-compatible chips promise a manufacturing shortcut: they leverage the same fabs and tooling that churn out conventional processors, potentially packing over a million qubits into a single device. That proposition has attracted fresh global interest as firms such as PsiQuantum and Silicon Quantum Computing hunt the same “white whale” of large-scale quantum hardware.
Diraq has been expanding its US footprint, opening a San Francisco office in January, and in April joined DARPA’s Quantum Benchmarking Initiative, one of only 15 companies worldwide chosen to vie for up to US$300 million in defence R&D funding. Looking ahead, Diraq has signed a letter of intent to establish a lab at the Illinois Quantum and Microelectronics Park when it opens in 2027.
Closer to home, Diraq is collaborating with fellow Sydney startup Emergence Quantum on cryogenic-temperature semiconductor circuits, a critical component for stabilising qubits. With its blend of pragmatic chip design and strategic partnerships, Diraq aims to leapfrog common quantum bottlenecks on the path to truly transformative computing.
Due Diligence: Capital Brief
Five Faces has closed a $1M Series A to remove paper forms from hospitals
Founder: Nicole Nixon and Abdul Alabri
Brisbane-based patient experience software provider Five Faces has closed a $1 million Series A round led by Utiliti Group, with backing from the Queensland Government’s Female Founders Co-Investment Fund. This marks its first institutional financing since its 2019 launch as Alphalitica, which pivoted from digital signage into modular, low-code health-tech solutions in 2024.
Five Faces digitises every touchpoint of the hospital journey, replacing paper forms and long queues with a mobile-first check-in and appointment-management platform. CEO Nicole Nixon, recently crowned Entrepreneur of the Year at the 2025 ARN Women in ICT Awards, said patients now expect the same seamless experience they enjoy in travel and retail. On the technical side, the Five Faces configurable architecture overcomes common IT-integration hurdles, cutting administrative overhead and speeding up patient flow.
The platform is already live across the Sydney Local Health District, Alfred Health and New Dunedin Hospital, and earned Five Faces a NSW Government Premier’s Award for its mass-vaccination check-in tool during the COVID-19 response. Customers appear to love the platform, which achieved a 32% year-over-year revenue growth in 2024.
Due Diligence: Startup Daily
RecycleSmart raises $1.5M in crowdfunding to recycle the awkward rubbish you’re not quite sure about
Founders: Marco Prayer and Giorgio Baracchi
RecycleSmart, the Sydney-based “Uber for waste” platform, has closed A$1.5 million in its latest equity crowdfunding via Birchal, drawing nearly 1,000 retail investors alongside A$200,000 from wholesale backers. Founded in 2019 by CEO Giorgio Baracchi and CTO Marco Prayer, the scale-up now operates in every Australian state and territory except the Northern Territory, pairing households, businesses and 26 councils with independent-contractor drivers for doorstep pick-ups of hard-to-recycle items.
Since launch, RecycleSmart has diverted over 1.5 million kilograms of waste from landfill and generated $3 million in annual recurring revenue. Its app connects users with local drivers who collect soft plastics, e-waste, blister packs, polystyrene, textiles, kitchenware and batteries, delivering materials to a network of 60 recycling partners, including the Red Cross.
Baracchi says the fresh capital will accelerate expansion into larger urban markets and add new service features. The company is currently sitting on A$3.5 million in revenue and needs to reach $5.5 million to break even.
With 16 staff at its Brisbane headquarters and some 70 contracted drivers, RecycleSmart has built a “very simple” user experience: bag any unwanted item, leave it on your doorstep and the network takes care of the rest. By leveraging a gig-economy model, the startup plans to scale rapidly and tackle Australia’s recycling challenges head-on.
Due Diligence: SmartCompany
Cohabit secures $1.2M Seed round to bring AI tooling to strata managers
Founders: Marco Prayer and Giorgio Baracchi
Sydney proptech startup Cohabit has secured $1.2 million in a seed round led by high-profile backers, including Qantas chair John Mullen, DigiDirect and Booktopia CEO Shant Kradjian, Sentia founder Michael Cindric and KerinBenson Lawyers principal Christopher Kerin. Founded in 2023 by Thom Richards, Cohabit has amassed 50,000 building profiles and employs ten staff across development, product, customer service and go-to-market functions.
Cohabit’s platform ingests strata records, building specifications, pricing and benchmark data to generate an AI-powered health score and digital profile for residential blocks. The health score is a full view of a building combining financial stability, compliance, and structural integrity. This independent “source of truth” dashboard caters to strata managers assessing portfolio performance, owners tracking maintenance needs, and apartment buyers conducting due diligence.
Richards, who co-founded payment platform Managed App in 2017 and self-funded Cohabit, has opted to onboard investors with direct strata expertise.
Looking ahead, Cohabit will channel funds into new features: an insurance risk rating module, an expert-portal SaaS for inspection reporting, and a levy-payment system to streamline owners’ contributions. Cohabit has landed 15 leading strata inspection firms and is fielding partnership inquiries from listing portals, insurers and adjacent services aiming to integrate its benchmarking tools.
Due Diligence: SmartCompany, Startup Daily
Brainfish lands $9.8M pre-Series A to grow AI-powered customer success agents and platform
Founders: Daniel Kimber & Ajain Vivek Thankaswamy
Sydney’s Brainfish has secured $9.8 million (US$6.4 million) in a pre-Series A round led by Prosus Ventures, with follow-on support from Peak XV’s Surge and Macdoch Ventures, taking its total funding to around US$15 million. The AI-driven customer-experience platform will deploy the fresh capital to establish a US headquarters, grow its American team, scale engineering resources, and accelerate product and machine-learning development at global enterprises.
Co-founded in 2023 by former SiteMinder product leads Daniel Kimber and Ajain Vivek Thankaswamy, Brainfish operates from offices in the US and India and boasts active users across Australia, Asia, the UK and the US. The startup has achieved 400% year-on-year growth by embedding “ambient” AI agents and systems that monitor user interactions via computer vision and contextual intelligence. These detect friction points in real time and deliver proactive support before issues escalate.
To date, Brainfish’s agents have provided automated guidance to over five million users for clients such as Relevance AI and ASX-listed Mad Paws, with early adopters reporting a 30–40% lift in customer satisfaction, sub-second response times, and a 70–90% reduction in support tickets.
Due Diligence: Startup Daily, SmartCompany
Alumly raises pre-revenue round to help university students gain work experience while they’re learning
Founder: David Yip
Melbourne’s Alumly has closed a seven-figure pre-revenue round led by Ann and John Ellis, co-founders of London-based Mauve Group, marking one of the region’s largest early-stage edtech investments this year. Founded by former Salesforce APAC education lead David Yip, Alumly aims to overhaul the course-to-career journey for university students in an AI-driven labour market.
The “earn while you learn” platform embeds paid work experiences into tertiary studies, addressing the twin crises of automated graduate roles and chronic skills shortages. By partnering students, employers and universities, Alumly offers a flexible, pre-qualified talent pipeline that tackles misaligned curricula and broken hiring practices.
Alumly is targeting the US$1.4 trillion global market by delivering scalable software that bridges systemic gaps across education and employment.
With its public launch slated for early August, Alumly is set to transform how Gen Z graduates transition into meaningful careers amid rapid AI adoption, making Melbourne the launchpad for a solution with worldwide impact.
Due Diligence: Startup Daily
💸 Wins💸
🏢 Singapore-based Acclime has completed its acquisition of Tim Baker’s Boutique Capital, a back-office incubator for emerging VCs. (Capital Brief)
Boutique Capital serves as a "one-stop shop" for new fund managers, handling operations, compliance, accounting, and AFSL licensing. Clients include Archangel, Antler, Athletic Ventures, and Purpose Ventures.
The firm uses a fixed-fee model, charging flat fees regardless of fund size.
Boutique Capital tries to bridge the domestic funding gap. While institutional capital often flows offshore, Boutique enables smaller local funds, many structured as ESVCLPs, to attract wholesale investors onshore.
💸 InDebted, the consumer debt recovery platform, snaps up Debtworks and AmSher (Capital Brief)
Australian debt-management fintech acquires New Zealand’s Debtworks and US telecoms collector AmSher in “eight-figure” deals.
Since its 2016 launch, InDebted has secured significant funding rounds, including a recent A$60 million Series C in 2024. This capital has fueled its AI-powered platform, Receeve, and now a total of six acquisitions.
The company utilises AI, automation, and self-service technology to resolve debt in a compassionate and empathetic manner. Notably, 80% of interactions are self-mediated, contributing to a low 2% loss rate.
InDebted has investment from Westpac Reinventure, Carthona Capital, Airtree, Alceon, PCP, and Perennial.
🚜 Tractor Ventures marks $100 million in lending out the door (Capital Brief)
Melbourne's Tractor Ventures has lent over A$100 million to more than 250 scale-ups since 2021.
Tractor targets businesses with A$2–20 million in revenue, providing growth capital where traditional banks and VCs typically won't.
The company recently launched new working-capital lines and R&D funding products. It now advances 80% of quarterly R&D claims, offering an alternative to costly equity raises.
Tractor maintains a 2% default rate, matching major banks and staying well below the double-digit norms for alternative lending, attributed to its sector expertise.
🥼 The 2025 Future Fellowships round has awarded $114.6 million to 100 mid-career researchers across Australia. (Innovation Aus)
These multi-year Australian Research Council (ARC) grants will support vital projects ranging from renewable energy and AI to biotechnology. Victoria and New South Wales led the country with 32 Fellowships each, followed by Queensland (17), the ACT (7), and South Australia and Western Australia (6 each).
Here are some notable projects receiving funding:
Assoc Prof Ruifeng Yan (University of Queensland): Awarded $1.29 million to develop data-driven models for renewable energy grid stability.
Prof Jahangir Hossain (University of Technology Sydney): Awarded $1.29 million for quantum-inspired digital twins to strengthen electricity grids against extreme weather.
Prof Lina Yao (Macquarie University): Awarded $1.28 million to advance adaptive AI systems using large language models for complex, multimodal decision-making.
For a complete list of the fellowships (perhaps some investment opportunities in a few years!), head here.
💭 Opinion 💭
Why young talent is leaving Australia’s venture capital industry by Claire Bristow in Capital Brief
Ex-VC now turned operator (CoS at Lyka), Claire Bristow, has written about the flurry of activity among young VCS moving away from early-stage investment. Her op-ed discusses why this is happening and what it could mean for Aussie VCS if the same partners control all the capital.
The main reason young VCS are leaving is due to a lack of clear career progression, as there is a bottleneck to becoming a partner. She highlights the modest financial upside, since carry is limited. Interestingly, Claire also notes that for some VCS, including herself, the grass might be greener working at the startups they’re funding.
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📆 Notice Board 📆
🎖 Forbes 30U30 is now open for Australia! Know a youngish legend doing some cool stuff. Nominate them here.
The best place to find upcoming events to attend and promote any events you’re hosting is the ANZ Startup Events Calendar.
Would you like to promote an event or an opportunity? Enquire about a Notice Board promotion here.
🧠 KaaS (Knowledge as a Service)
Will’s Pick 💁♂ A Guide to Seed Fundraising by Geoff Ralston from Y-Combinator
Found myself sharing this great resource with a founder who was very early on their journey. This article provides a comprehensive breakdown of the seed (and angel round) fundraising process, covering key aspects such as determining when and how much capital to raise, understanding various financing options (including SAFE and convertible notes), and effectively engaging with investors.
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‘Til next time,
👋 Will