Published on the 21/04/2026 | Written by Heather Wright

Later-stage bets reshaping local market…

AI and fintech have emerged as the dominant beneficiaries of startup investment across Australia and New Zealand, with climate and clean tech funding softening in a shift that is concentrating capital into fewer, more mature companies – and reshaping which local technologies are reaching enterprise scale on both sides of the Tasman.

The Autumn 2026 Young Company Finance report from NZ Growth Capital Partners and Angel Association New Zealand shows total startup investment rose to $754 million across 166 deals in 2025, a 61 percent year-on-year increase in total investment and a 14 percent rise in deal count. Australia recorded a similar pattern, albeit at far greater scale.

“Larger rounds are becoming more common, and that matters.”

The State of Australian Startup Funding 2025 report from Folklore Ventures and Cut Through Ventures found total funding was up 31 percent to $5.4 billion in 2025. As in New Zealand, the headline growth was driven by larger rounds, not a surge in deal numbers, which were down 20 percent year on year to 390.

Across both markets, the data points to a shift to more money flowing into later-stage, deployable technologies and less tolerance for long-horizon bets.

Execution, not experimentation

The most striking signal in New Zealand’s data is the stage profile of funding with nearly 49 percent of all successful rounds going to early expansion or expansion-stage companies. Those deals accounted for 83 percent of capital investment. The year saw 33 proof of concept deals recorded, with investment in PoC companies remaining largely unchanged.

“Larger rounds are becoming more common, and that matters. It signals that New Zealand companies are progressing further, staying competitive on a global stage and attracting the depth of funding required to scale,” says Angel Association of New Zealand chief executive Bridget Unsworth.

The report notes that New Zealand’s venture market is showing clear evidence of maturation at the scale-up end, with significantly larger follow-on rounds being raised by a small number of existing high-growth companies, with the market backing known performers. But the data also suggests a narrower pipeline of new companies entering large funding rounds, with the market not brining many new names into the $10 million-plus category.

But Unsworth warns that while larger funding round bring benefits, there’s a danger too. With funding heading to the later-stage rounds, there’s a natural risk that early-stage investment – ‘the lifeblood of the ecosystem’ – receives less attention and the pipeline of companies capable of reaching larger rounds will dry up.

It’s not a uniquely New Zealand challenge, with Australia’s data mirroring a similar concentration. The top 20 deals in 2025 accounted for 58 percent of total funding, with deal counts falling even as total capital rose. Median round sizes increased, at least marginally, at most stages.

AI leads, but fintech and healthtech are hot to trot too

AI featured prominently in both markets, but the nature of investment has shifted. The New Zealand report recorded seven AI-related deals – five rounds over $1 million and one large funding round of over $20 million – accounting for nine percent of all funding during H2 2025.

In Australia, 61 percent of total funding went to companies using AI somewhere in their technology stack. More than AU$1 billion went to AI-native startups and AI deals cleared at higher valuations than the rest of the ecosystem, the Australian report notes, with AI-at-the-core companies demanding higher valuations and attracting sharper investor competition, while non-AI deals were pricing within tighter, more disciplined bands.

“This bifurcation reinforces selectivity rather than broad-based hype,” the report says. “Investors report a willingness to pay up where AI meaningfully improves scale , defensibility or exit potential, while applying conservative benchmarks elsewhere.”

Quentin Wallace, cofounder and venture partner of Archangel Ventures, says the market is looking for ‘a synergy between strong growth and innovative products’.

The report says AI has acted as an accelerant, not because ‘AI’ sells, but because it compresses time. Startups can reach minimum viable product faster and more resource-efficiently, and iterate with minimal engineering effort, pulling companies into a fundable position earlier.

Both reports identify fintech and healthtech as consistent investment leaders.

In New Zealand, the Young Company Finance report notes fintech and healthtech recorded strong investment growth in H2 2025, with fintech increasing five percent year-on-year as a share of total deals to hit 12 percent of deals and 13 percent of funding. Five multi-million-dollar deals were logged during the half year, with total investment in the sector up 133 percent year-on-year.

Healthtech too, attracted ‘significant’ investment, accounting for 15 percent of total funding, with seven rounds exceeding $4 million, and overall investment in the sector up 89 percent year-on-year.

In Australia, fintech attracted $868 million, with biotech and medtech drawing $829 million, pushing them into second and third place, behind AI.

Climate-tech and clean-tech investment declined in New Zealand during 2025, a trend the report says reflects global funding patterns. Australia’s experience adds important context: Climate and deep tech investment continues, but later-stage rounds increasingly rely on government support or blended capital, rather than private venture capital alone.

Stepping away from the two reports – and from broader climate trends – agritech is entering a new phase of growth in New Zealand, with significant capital raises and a maturing ecosystem focused on scaling globally.

Brendan O’Connell, AgriTech New Zealand chief executive, says the scale of recent capital raises from companies like Halter, Hectre, Agovor, Scanabull and Scentian Bio ‘shows we’ve moved from promising to proven’.

In March, Halter raised NZ$377 million in series E funding, at a $3.43 billion valuation. Meanwhile, Hectre, which uses AI and computer vision to capture real-time data on fruit size, colour and quality before it enters the packhouse, raised $12 million in a series A round in February.

“Capital growth is a signal, but system strength is the goal,” says Young Company Finance. In practice, the data suggests that strength is increasingly defined by relevance. As capital concentrates across both markets, fewer companies are making it through, but those that do are arriving with the scale and backing buyers expect.