For the first time in the history of this report, Victoria has overtaken New South Wales as Australia's top state for startup funding. The implications run deeper than a single year of data.
Victorian startups raised $2.2 billion across 134 deals in 2025, nearly triple the previous year and the state's second-best result on record. New South Wales finished second with $1.7 billion across 160 deals. NSW still leads on raw deal volume, but the big money has shifted south.
The data comes from the State of Australian Startup Funding 2025 report, published by Cut Through Venture and Folklore Ventures, and is confirmed across SmartCompany and Capital Brief coverage.
The shift was not driven by broad-based growth across the Victorian ecosystem. It was driven by a handful of mega scale-up rounds at the top end of the market.
Airwallex raised a combined $730 million across a $498 million Series G and a $232 million Series F, both anchored in Melbourne. Synchron added $303 million in a Series D for brain-computer interface technology. Roller and other mid-stage Melbourne companies contributed further.
The structural change is visible in the deal size data. Rounds between $20 million and $49.9 million in Victoria jumped from just four in 2024 to 17 in 2025. Deals above $50 million doubled from three to six. Victoria's median Series B+ deal size hit $40 million, compared to $30 million in NSW.
Early-stage activity actually softened in Victoria. Sub-$5 million deals fell from 87 in 2024 to 66 in 2025, and rounds between $5 million and $19.9 million declined from 29 to 17. The dollar growth came entirely from the top end of the market.
SmartCompany reported that Victoria's result was driven by a rebound at the top end of the market, with early-stage activity softening at the same time.
Victoria's sector mix differed notably from the national picture.
Capital was concentrated in fintech ($759 million) and biotech/medtech ($526 million), followed by climate tech and cleantech ($208 million) and healthtech ($165 million). AI as a standalone category was comparatively small in Victoria, but Cut Through Venture's analysis found that 75% of Victorian startups that raised capital in 2025 had an AI product on the shelf. AI is increasingly embedded across categories rather than operating as a distinct vertical.
NSW should not be written off on the basis of one year's headline number. The state recorded 160 deals to Victoria's 134, maintaining its position as the deepest early-stage market in the country.
Sydney's strength at seed and Series A remains significant. The volume of companies entering the pipeline in NSW is still larger than any other state, and historically that breadth has translated into later-stage scale-ups that drive future headline numbers. The question is whether NSW can retain those companies as they grow, or whether Melbourne's deepening clusters in fintech, medtech, and climate continue to attract the biggest rounds.
Queensland raised $504 million across 61 deals, crossing the $500 million mark for the first time. This represents meaningful growth and reflects the maturation of Brisbane's startup ecosystem, particularly in climate tech, biotech, and defence-adjacent sectors.
The remaining states and territories collectively accounted for approximately 9% of total funding, with pockets of activity in South Australia (defence tech, space) and Western Australia (resources technology, climate).
Victoria led the states on gender diversity in funding, with 37% of its capital going to teams with at least one woman founder, compared to the national average of 24%. However, the share of capital going to all-women founding teams in Victoria fell sharply to just 1% in 2025, down from 17% in 2024. The gains were concentrated in mixed-gender teams anchored by large rounds.
Scale-up capital now follows the biggest companies, regardless of which state they are based in. If your Series B or Series C story is not world-class, you will feel the squeeze regardless of location.
Talent and networks are increasingly mobile. Melbourne's medtech and climate clusters are pulling serious weight, and founders should expect more cross-state co-founder arrangements and follow-on investment moves.
Policy still matters. NSW's MVP Ventures Program, administered through the Department of Enterprise, Investment and Trade, is injecting fresh capital into the early-stage ecosystem. LaunchVic's legacy helped create the conditions for Victoria's current position, though its future is uncertain following state budget changes. Both states need sustained, long-term commitment to startup ecosystem development.
This feels structural, not a one-year blip. Airwallex's scale and Victoria's deep medtech and climate clusters have broken NSW's long monopoly on headline funding. NSW will bounce back on early-stage breadth, and in any given year a handful of large Sydney rounds could flip the numbers again. But the two-state race is now genuine, and that is healthy for the whole country.
The real story is not which state "won." It is that Australia now has two globally competitive startup hubs with distinct strengths, and founders are better served by that competition than by a single-city monopoly.
What do you think? Permanent shift or temporary?
State of Australian Startup Funding 2025 (Cut Through Venture and Folklore Ventures) - australianstartupfunding.com
SmartCompany, "Victoria takes venture capital crown from NSW in $2.2 billion funding surge" (23 February 2026) - smartcompany.com.au
Capital Brief, "Victoria surpasses NSW in venture capital funding" (February 2026) - capitalbrief.com
Overnight Success, "Nine interesting things from the 2025 State of Startup Funding Report" (5 February 2026) - overnightsuccess.com.au
Victoria received the most startup funding in 2025 with $2.2 billion across 134 deals, overtaking New South Wales for the first time. NSW raised $1.7 billion across 160 deals, still leading on deal count. Queensland crossed $504 million across 61 deals.
Victorian startups raised $2.2 billion across 134 deals in 2025, nearly triple the previous year's result and the state's second-best year on record. The growth was driven primarily by large scale-up rounds from Airwallex, Synchron, and Roller.
Victoria's result was driven by a rebound at the top end of the market. Rounds between $20 million and $49.9 million jumped from four in 2024 to 17 in 2025, and deals above $50 million doubled from three to six. Airwallex's combined $730 million across two rounds was the single largest contributor. Early-stage activity in Victoria actually softened.
New South Wales raised $1.7 billion across 160 deals in 2025. While NSW lost the top funding position to Victoria, it still led on deal count, reflecting its continued strength in early and mid-stage startup activity.
Queensland raised $504 million across 61 deals in 2025, crossing the half-billion mark for the first time. Growth was concentrated in climate tech, biotech, and defence-adjacent sectors.
The top-funded sectors in Victoria were fintech ($759 million), biotech and medtech ($526 million), climate tech and cleantech ($208 million), and healthtech ($165 million). 75% of Victorian startups that raised capital had an AI product embedded in their offering.
37% of Victorian venture capital funding went to teams with at least one woman founder in 2025, compared to the national average of 24%. However, the share going to all-women founding teams fell sharply to just 1%, down from 17% in 2024.
The shift appears structural rather than a one-year blip. Victoria now has deep clusters in fintech, medtech, and climate tech that attract large later-stage rounds. However, NSW still has the deepest early-stage pipeline in the country, and a handful of large Sydney rounds in any given year could shift the headline numbers again.
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