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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. 🚀
👀 Headlines 👀
📊 Cut Through Venture's latest Q3 report says Australian startups raised a record $4.2 billion. Looking back on the whole year, that equates to $8 billion in the first nine months of 2026, the fastest pace on record. However, almost half of that $8 billion came from one company, Firmus. (Startup Daily, InnovationAus)
Firmus' $2.85 billion August round made up 69 per cent of Q3. Across five rounds since mid-2025, it has raised $4.51 billion, almost a third of all the capital Cut Through has tracked over the past two years and more than Airwallex, Synchron, AdvanCell and Heidi combined.
As I wrote last week, Firmus has very little to do with Australian venture capital. None of the big local VCs is on its register, and its money has come from the likes of Coatue, Nvidia, Blackstone, and Jane Street, as well as listed equity fund managers. It's in the data because Cut Through counts any primary equity raise by an Australian ‘startup’, regardless of whoever writes the cheque.
So, based on Cut Through's quarterly figures, Australian startups have raised $4.3 billion in the first nine months of 2026, excluding Firmus. That's still up about two-thirds on the same period last year ($2.6 billion, also without Firmus), so 2026 is still a stronger year for capital deployed than 2025. It’s also the third-best start to a year on record, behind 2021 ($6.9 billion) and 2022 ($5.5 billion).
Regardless, without Firmus, quarterly funding has now fallen three quarters in a row, from $1.88 billion in Q4 2025 to $1.63 billion, $1.39 billion and $1.31 billion in Q3, down 30 per cent. The power law is well and truly showing up too; the top ten deals took a record 93 per cent of Q3 capital, rounds under $10 million raised just $162 million between them, teams with a female founder won 32 per cent of deals, but only 2.7 per cent of capital, and 71 per cent of surveyed investors say their funds have had no exits so far this year.
🧊 If the AI bubble is about to pop, few would have picked a former bitcoin miner from Launceston as the place it started. But in the week after Firmus pulled its float, AirTrunk paused its own listing, CoreWeave's debt traded at distressed levels, and ASX-listed data centre stocks slid. (The Australian, Capital Brief)
AirTrunk, which Blackstone bought in 2024, has paused its planned Singapore listing due to market volatility. It's the second data centre float to stall in a week.
On the ASX, IREN fell 12.2 per cent, Macquarie Technology 8.9 per cent and NextDC 7.4 per cent. IREN isn't slowing down, though, announcing plans for a data centre in Wagga Wagga worth more than $10 billion in the same week.
Most of that is probably an overreaction, but CoreWeave is the one to watch. It's the closest listed comparison to Firmus, renting out Nvidia GPU capacity at scale, and its bonds are now trading at yields above 15 per cent. If investors wouldn't back Firmus at $44 billion, it's fair to ask what CoreWeave should be worth.
As for Firmus itself, the fallout continues. The company could be face a forced share buyback and guarantees to backers including Nvidia and Blackstone if it can't revive a listing, Fidante-backed fund Lennox marked its stake up to the $11 IPO price days before the float was pulled, and Liberal senator Dave Sharma has asked ASIC to examine the bookbuild. Firmus is now seeking about US$3 billion privately and eyeing a Nasdaq listing.
🏛️ Australian biotech has found support from Labor senator Michelle Ananda-Rajah breaking ranks with Treasurer Jim Chalmers to call for a rethink of the budget's changes to the R&D Tax Incentive. (AFR)
A former physician-researcher, Ananda-Rajah says splitting 'core' from 'supporting' R&D is a false distinction because the two reinforce each other, and that the changes will hurt early-stage biotechs such as Cartherics. She wants the government to be "holding on with both hands" to sectors like biotech, climate tech and deep tech.
This follows reports that fund managers have begun shelving plans to invest in Australian biotech. Cartherics told Treasury's consultation that investors had frozen decisions, and AusBiotech says its members are looking at offshore options.
Fintechs share the concern. The FinTech Annual Census 2026 from RSM and FinTech Australia, launched at Parliament House on Wednesday, surveyed 135 fintechs, with 56 per cent worried about the RDTI changes and 61 per cent wanting the 50 per cent CGT discount to be kept. (Startup Daily)
👜 Bellroy, the Aussie brand that made its name selling slim wallets online, is making a bet on physical retail with the first opening in Melbourne in December, followed next year by Sydney, two in New York and a partner-run store in Kuala Lumpur, with 20 stores planned globally within five years. (AFR)
Co-founder and CEO Lina Calabria says that, back when Bellroy only sold wallets, "a wallet isn't enough to create a whole store experience". Now that the range covers phone cases, bags and luggage, she reckons it finally is.
It's a very different ending to most of the Millennial direct-to-consumer class of the 2010s. Allbirds was worth US$4 billion before it listed in 2021, sold this year for just US$39 million, and is now reinventing itself as a neocloud (given the week Firmus has had, the timing isn't great 😬). Casper peaked at US$1.1 billion and was taken private for less than US$300 million.
Bellroy has taken the slower road, aiming for 10 to 20 per cent annual sales growth. Sales rose 15 per cent to $146 million last financial year, up from $48 million in FY20, and EBITDA rose from $10.8 million to somewhere between $12 million and $18 million.
In 2019 Bellroy raised US$8 million from US and Australian investors, including Silas Capital. Lina Calabria was recently on Imperfect Company, where she told the story of getting Bellroy off the ground!
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⚡ Startup Retro ⚡
Archa raises $11M, five years after pivoting from neobank to business cards
Founder: Oliver Kidd
Archa, the Melbourne business credit card and spend management platform, has raised $11 million in equity alongside a $50 million debt facility.
The equity came from family offices, venture investors and entrepreneurs, including founders behind Zip, The Iconic, Betashares and Netspace, US venture firm The Fintech Fund and former Macquarie executives. Archa hasn't named a lead investor, the round stage, or the valuation.
It's a different business from the one founder Oliver Kidd, a former corporate M&A lawyer, set out to build. Archa launched as Archa Money, a consumer neobank for millennials with a prepaid debit card and app. After about 18 months, Kidd switched to corporate cards, an idea that stemmed in part from struggling to obtain a credit card for his own profitable company. Archa secured Mastercard principal issuing membership in 2020 and launched its business card in October 2021.
Archa raised about $3.8 million in its early years, then a $3 million round in 2021 led by BW Equities and Lazarus at a $15 million pre-money valuation, with Quade Cooper and Emily Skye among its backers. In April 2022 it raised a pre-Series A of $4 million in equity, led by Wisr CEO Anthony Nantes, plus a $20 million debt facility from Roadnight Capital.
Archa says annual recurring revenue is up 184 per cent and it now handles more than $200 million in annualised spend, with customers including the Sydney Roosters and Higgins. The new equity will go into product, including AI tools that check purchases against company spending policies, while the debt funds lending based on business performance rather than personal guarantees.
Due Diligence: The Australian, Startup Daily, AFR
RedOwl raises $5.3M seed to stop businesses overpaying suppliers
Founders: Jitto Arulampalam, Thushan Shanmugarajah
RedOwl, a Melbourne startup using AI to stop margin leakage, has raised a $5.3 million seed round at a valuation of close to $40 million. The round was led by Tidal Ventures, with CP Ventures also participating.
Founded in 2024, RedOwl goes after what it calls margin leakage: the gap between the margin a business expected and the margin it actually made, which tends to hide between contracts, billing, purchase orders and payments. It starts by pulling in 12 months of a company's ERP transactions, contracts, rate cards and banking files to measure how much is leaking. It then integrates AI agents into the payment process, checking each invoice, purchase order, and card transaction against contracted rates, purchase order balances, supplier bank details, general ledger codes, and approval limits before anything is approved or paid.
That covers suppliers billing above contract or rebates going unclaimed, revenue lost to underbilling and unrecovered pass-through costs, and duplicate payments, banking errors and out-of-policy card spend, with a dashboard tracking how much the finance team has stopped.
RedOwl lists Aussie Broadband and Vicinity Centres as customers. RedOwl analysed 12 months of its data, including 5 million customer invoices and 12 million supplier invoices, to check whether wholesale network costs were being passed on to enterprise customers, and found millions of dollars in potential leakage. RedOwl notes that figure is leakage identified, not money recovered.
RedOwl went through Mastercard's Start Path program in 2024 and was named Emerging Fintech of the Year at this year's Finnies.
Due Diligence: AFR, Australian FinTech, FinTech Australia
Memobottle raises $2M at $10M valuation for paper-shaped reusable bottles
Founders: Jesse Leeworthy, Jonathan Byrt
Memobottle, the Melbourne maker of flat, paper-sized reusable water bottles, has taken $2 million from Athan Didaskalou and Richard Li, the co-founders of luggage brand July, for a 20 per cent stake, valuing the business at $10 million.
The deal grew out of conversations that started nine months ago, when co-founders Jesse Leeworthy and Jonathan Byrt asked Didaskalou and Li for advice on retail, product development and partnerships. The pair invested personally, will join the board and say the money is going into growth. Li will focus on manufacturing, supply chain, and operations, and Didaskalou on brand, marketing, and partnerships, where he thinks July's deals with the Australian Olympic team, Qantas, American Airlines, and the Australian Open can help Memobottle expand overseas.
Leeworthy and Byrt started Memobottle in 2014 with a Kickstarter campaign for a flat bottle sized like a sheet of paper, designed to slide into work bags. The range now includes bottles in paper sizes such as A5 and A6, in clear, coloured, and stainless-steel versions, slim tote and crossbody bags built to carry them, and the memobento lunchbox range, which drew about $500,000 in Kickstarter pre-orders. The founders also ran an equity crowdfund on Birchal in 2018. Memobottle turned over $8 million last financial year and is stocked in more than 2,000 stores across more than 100 countries.
The July founders also helped design its next product, memo Round, which launched on Kickstarter on Wednesday. It's Memobottle's first-round bottle, insulated with double-walled stainless steel, with a concealed mouthpiece that rotates 360 degrees and three parts that come apart for cleaning, available in two sizes and eight colours.
Due Diligence: SmartCompany, Startup Daily
💸 New Fund, Who Dis? 💸
💰 Antler has launched its third Australian fund, targeting at least $70 million, with Nicola Forrest's Coaxial Foundation as a cornerstone through a $30 million partnership aimed at women founders. (Startup Daily, AFR)
Coaxial is committing $20 million to Antler Fund III, plus up to $10 million for operating costs and grants through a program called Momentum. Women-led teams Antler backs get $60,000 in non-dilutive funding at first investment and another $60,000 at follow-on. When they raise a seed round with an external lead, Coaxial pre-commits 15 per cent of the round, alongside 30 per cent from Antler.
General partner Michael Kron says returns from its all-women founding teams are at 2.6 times Antler's initial investment, against 2.1 times for the portfolio as a whole. Antler hasn't said how that's measured, but it has backed 66 women founders across 56 companies with $19 million, and those companies have since raised $109 million. Antler's first Australian fund was $46 million in 2019, and its second closed at $77 million in 2024, above a $60 million target.
Australian programs for women founders, such as LaunchVic's Alice Anderson Fund and Queensland's Female Founders Co-Investment Fund, tend to match money once a lead investor is in. I couldn't find another that pre-commits a fixed share of a company's next round, which effectively guarantees part of the seed raise for founders who can land a lead.
💰 Scale Investors, which backs female-founded startups, is raising a $50 million second fund. (AFR)
Its $35 million first fund was cornerstoned by Carla Zampatti's children, Minderoo's strategic impact fund and Innovation Victoria, with the Thickins Family Office, Kristy Chong and The Phillips Foundation also investing. Portfolio companies include Oli Medical, Clean Slate Clinic and Proseek Bio.
Scale started 13 years ago as an angel syndicate and went through a management buyout in 2023. It's now run by Samar Mcheileh and Chelsea Newell, both ex-JBWere, and Roo Harris. It says it has reviewed about 600 women-led deals and expects to hold 10 portfolio companies by year-end.
💰 AustralianSuper has now committed more than $1.5 billion to Australian venture capital. (AustralianSuper)
Superfunds typically invest in Australian startups via the big three funds, Blackbird, Square Peg and AirTree. Through this, AustralianSuper has exposure to more than 250 startups and seven of Australia's nine unicorns.
🚀 Wins 🚀
🛡️ Uncrewed ground vehicle developer and Queensland-based GaardTech has been selected for Phase 2 of GroundBreaker, the US Army's joint uncrewed ground vehicle demonstration. (Defence Connect)
Its Jaeger Alpha and Delta combat robots will go through live operational assessments with US Army evaluators.
Founder and CEO Steen Bisgaard says it's a step towards supplying the US Army's Drone Dominance program. Earlier this year GaardTech won an open tender to supply the ADF and signed an agreement with a Japanese trading house to supply Japan's Ministry of Defense. GaardTech was founded in 2017.
⚖️ Dispute Buddy, Jenny Rudd's legal tech startup, has reached $2 million in annualised revenue nine months after launching. (Startup Daily)
It uses AI to find patterns of coercive control and other abuse in years of text messages and turns them into a report lawyers can use. It raised a $765,000 pre-seed from angels and Techstars Sydney late last year and is about to open a seed round, with a lead already in place. 👀
⚡ Gridsight won at this week's AFR Energy Awards for its fault-detection AI with Horizon Power, which resolved more than 510 high-risk faults in six months. (AFR)
🤑 Aussie Raisins 🤑
📡 Morse Micro, the Blackbird-backed Sydney Wi-Fi chipmaker, has appointed advisers and taken another formal step towards an IPO. (Capital Brief)
It raised an $88 million Series C led by Japan's MegaChips in September 2025, including $35 million from the National Reconstruction Fund.
🛰️ Thoma Bravo is preparing to relist aerial imagery company Nearmap on the ASX at a valuation of more than US$4 billion (about $5.75 billion), four years after taking it private for about $1.06 billion. Goldman Sachs and Barrenjoey are advising. (AFR)
💰 Eudaemon, the Sydney sexual health medtech backed by a Eucalyptus co-founder, has hired 115 Capital to raise about $10 million. (AFR)
🥤 Posca Hydrate, the hydration drink co-founded by radio host Merrick Watts and Ed Stening, is raising $5 million to $7 million to grow in Australia and launch in the US, after lifting sales 50 per cent. (AFR)
💰 Auckland open banking fintech Qippay has raised NZ$5 million (about $4.4 million) from the All Roads Wholesale Fund for a 25 per cent stake. (Startup Daily)
💰 M&A 💰
🤝 Neara, the Australian infrastructure digital twin company valued at about $1.1 billion, has acquired Zepben, a Canberra company that builds electrical models of power networks. Terms weren't disclosed. (Capital Brief, iTWire)
Founded in 2016 by former Google engineer Daniel Danilatos, Karamvir Singh (now chief strategy officer) and Jack Curtis (now chief commercial officer), Neara builds engineering-accurate 3D models of entire power networks, which utilities use to simulate storms, bushfires, floods and capacity limits and to plan upgrades without sending crews out to survey. It says close to 90 per cent of Australian network utilities use it, along with SCE, CenterPoint, Scottish Power and ESB overseas.
Zepben, founded in 2014, turns a utility's scattered asset records into a standard electrical model of the network, enabling engineers to run load-flow, hosting-capacity, and outage-planning analyses.
Skip Capital, Scott Farquhar and Kim Jackson's family office, has backed Neara in every round since its 2018 seed and led its US$14 million Series B in 2022. Square Peg led the US$7.25 million Series A in 2021 and has followed on in every round since. Prosus Ventures led a 2023 extension, EQT and Partners Group came in on the US$31 million Series C in 2024, and TCV led the $90 million Series D in February.
🔎 People Moves 🔍️
👤 Main Sequence has promoted Dr Elaine Stead to Partner, two and a half years after she joined as a Principal, as the deep-tech investor begins raising its fourth fund. (Business News Australia)
Stead leads Main Sequence's healthcare thesis, which focuses on women's health, diseases of ageing, autoimmune disease, neurotech, and prevention, and excludes preclinical and repurposed therapeutics. Her deals include Kinoxis, where Main Sequence put $5 million into a $6.75 million round last month, Currus Biologics, Macrobiome, Xylo and Xoma Labs.
Before Main Sequence, she ran venture capital at Blue Sky, including South Australia's $50 million venture fund, and was a founder of Human VC. She becomes the firm's seventh partner.
Main Sequence has been one of the busiest investors this year, with 11 deals, behind only AirTree's 12. Since Stead joined in March 2024, it has co-led Samsara Eco's $100 million raise, taken part in Q-CTRL's US$113 million Series B, Morse Micro's $88 million Series C and Emesent's $15 million round, and led Deteqt's $5 million seed and Cauldron's Series A2. Two early bets, Gilmour Space and Advanced Navigation, are now valued at more than $1 billion.
👤 Simon Draper is the new secretary of the federal Department of Industry, Science and Resources, which runs most of Canberra's startup programs and the R&D Tax Incentive. (InnovationAus)
📆 Notice Board 📆
🚀 I’m heading to Startmate's Winter '26 Demo Day this Tuesday (20th October) in Port Melbourne, where the 16 startups in its latest accelerator cohort pitch at the end of their 12-week program.
This cohort includes startups building rockets, taking paperwork out of dental clinics, cutting construction cost estimates from days to minutes, and building guardrails and compliance tools for AI in regulated industries.
Check-in opens at 5:30 pm at The Timber Yard, 351 Plummer St, Port Melbourne, and pitches start at 6:30 pm. Early-bird tickets have sold out, and first-release tickets are $15 with the OS discount. Register here and use OS50 for 50% off. If you’re feeling extra nice, refer founders to the next cohort here.
⚡ Applications for ARENA's Launchpad grants of $500,000 for early-stage clean energy startups close at 4 pm AEDT on Wednesday 28 October.
Launchpad is the Australian Renewable Energy Agency's grant program for early-stage clean energy startups. This round has up to $15 million in grants of $500,000, plus up to another $500,000 for capital-intensive projects, for up to $1 million per company. As a grant, it doesn't take equity.
ARENA can't give feedback on eligibility before you apply, but questions can go to [email protected]. Apply here.
🎟️ West Tech Main, the flagship day of Western Australia's West Tech Fest, is on Tuesday 8 December in Fremantle, and Overnight Success readers get 10 per cent off early-bird and final-release tickets with the code OVERNIGHT.
This is for founders, investors, tech leaders and corporates in, or looking at, the WA ecosystem. Speakers announced so far include Layne Beachley, Checkmate co-founder Harry Dixon and On The House founder Remy Tucker.
Tickets: early-bird general admission is $369, early-bird startup founder tickets are $229 and under-25 tickets are $75. Get tickets here.
🧠 KaaS (Knowledge as a Service)
Will's Pick: The Distribution Era by Sophie Buonassisi and Paul Irving (GTMnow)
This is a cool write-up that starts with how the moat in B2B software has moved: from capital in the days of CDs and server racks, to product and sales in the cloud era, to product mechanics like viral loops in the product-led era. Now that AI has made software cheap to build and even cheaper to copy, they argue the moat has moved again, "off the product and onto the audience".
The article then goes through examples of this from Salesforce undercutting at $50 a month against Siebel's $5 million minimum, HubSpot owning the inbound movement while Marketo had the stronger product, and Notion's ambassador community beating Evernote's head start. Cursor, Harvey and Lovable are cited as the AI-native versions of the same playbook.
The takeaways for founders: build distribution from day one rather than after product-market fit, price on usage or outcomes rather than seats, and use AI in your own go-to-market. The product still has to be great; it just isn't the moat anymore.
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‘Til next time,
👋 Will