Australia's business R&D spending has fallen for nearly two decades and now sits at 0.9% of GDP,  less than half the OECD average, with the review panel warning the current scheme fails to attract or retain major R&D investment.

A new premium startup stream targeting cloud software, AI, and deep-tech companies would offer higher offset rates and include early commercialisation activities, while a separate SME and scale-up stream would tie ongoing access to the revenue growth trajectory, ideally cutting off companies the panel describes as using the RDTI "simply to stay afloat."

The report was authored by Robyn Denholm, Emeritus Professor Ian Chubb AC, Winthrop Professor Fiona Wood AO and Dr Kate Cornick. 

Find the full 136-page report here.

The report, in particular, called out the need for greater diversity of specialised early-stage VC funds in the VC space. The other was a lack of Series B+ investors locally, which pushes scale-ups to seek investment from offshore. The structural reason for this is that the ESVCLP tax benefits are limited to $250M in assets. The report suggests raising this to north of $500M to they can write bigger cheques at a later stage. 

The RBA stated that while inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025. 

In addition, the conflict in the Middle East has ironically added fuel to the inflation fire, resulting in sharply higher fuel prices that, if sustained, will further fuel inflation.

Certainly one to watch: if inflation continues to rise, we may see a compression in the valuations of companies at all stages, particularly after listing.

Thompson is pitching HeroForce as a product that would have been impossible to build without AI, centralising payroll, recruitment, and compliance across markets, and plans to price it as a percentage of customers' total labour costs rather than per-seat subscriptions, a trend we’re seeing across the markets. 

Despite the broader SaaSpocalypse sell-off hammering public software companies, Thompson argues that established players with regulatory approvals and deep customer relationships are the real beneficiaries of AI. 

The company raised $20 million at $3.40 a share ahead of the float, with Sydney fund manager Perennial Partners holding a 22.7% stake as the largest investor, followed by Alium Capital Management at 5% — both early backers alongside cricketer Steve Smith, who invested $100,000 for a 10% stake before Koala had a single customer.

Koala is forecasting revenues of $332 million this financial year (up 20% YoY) with US revenues growing two-thirds to $29.3 million and EBITDA nearly doubling to $24.8 million, as the company scales beyond its original mattress-in-a-box model into sofas, armchairs, and new international markets.

Unlike many funds that anchor valuations to last-round pricing indefinitely, Blackbird ties its later-stage marks to public market conditions, a discipline that means investors get a more honest picture of portfolio health in real time, rather than at entry, private marks and then exit.

The review cites Eucalyptus as the proof point, Blackbird first backed the telehealth company at seed in 2019, watched its marks rise and fall over six years, and ultimately saw it acquired at a US$1.15 billion enterprise value, returning more than 2x the firm's entire 2018 fund. 

Asia-Pacific startup and VC lead Thomas Jeng visited Adelaide's SouthStart conference this week, and his message to founders was blunt: if you don't own critical customer workflows, AI is an existential threat, not a tailwind. Companies like Canva, Notion and Zendesk, which are deeply embedded in how their customers operate, are positioned to survive the transition; those sitting higher in the stack are not.

Jeng flagged that roughly half of Australian adults are now ChatGPT users, and OpenAI's Sydney office has grown to 25 people.

One thing I’ve certainly noticed is that big tech, certainly developer tools, are making moves into Australia. OpenAI, Anthropic, Vercel, and NVIDIA are all currently building local teams.

The fund will aim to invest in 30–40 companies from pre-seed to Series A across digital health, medtech, and life sciences, targeting a 25% IRR over a 10-year term.

The syndicate, founded by Amandeep Hansra and Mian Bi, draws on a network of 1,000+ medical and dental practitioners.

Since 2019, the syndicate has backed 34 companies, with notable exits including Telecare (acquired by NYSE-listed Teladoc Health) and Clean Slate Clinic (now Australia's largest alcohol withdrawal services provider).

LaunchVic backed the original syndicate and has provided funding to support the fund launch. The funds leadership team includes Amandeep Hansra, Mian Bi, Louise Schaper, Tom Palmieri and Sarah Newby.

Quantum batteries exploit collective quantum effects, where storage units charge together faster than individually — the bigger the battery, the faster it charges. Charging time scales as 1/√N (where N = number of storage units), the inverse of conventional batteries, which take longer to charge as they grow.

The original prototype was built in 2022 using an organic microcavity (a multi-layer sandwich of materials that traps light) and proved the theoretical charging behaviour held in practice. The latest prototype adds layers that convert stored energy into electrical current, solving the key limitation of the first version. 

That being said, the prototype still has limitations: capacity is tiny (a few billion electron-volts) and charge is only held for nanoseconds. 

The device records offline, syncs automatically to the Heidi platform, and works across any care setting — exam rooms, ward rounds, and home visits.

Audio is encrypted on the device and deleted once synced, with a visible LED indicating when recording is active. Priced at A$219, it's available now with an early access discount of 25%, with bulk pricing available for clinics and teams.

Superpower will pay USD$3 million ($4.3M AUD) per year for up to a decade in exchange for exclusive US licensing rights, plus additional revenue from direct polymer sales. The technology being licensed is STEPP, which is designed to solve a decades-old problem in nasal drug delivery: compounds either wash away before absorption or require adhesives that trigger inflammation. 

Peptides, short amino acid chains used for injury recovery, metabolic health and longevity, have enormous consumer demand but almost no formal clinical research, as they're naturally occurring and largely unpatentable

Tetratherix CEO Will Knox said the company had exhausted pre-clinical validation and needed a partner to enter clinical trials, choosing Superpower over Big Pharma due to speed and market fit

Tetratherix shares closed 22% higher on the day of the ASX announcement. Superpower is currently defending a false advertising lawsuit brought by its US rival, Function Health, in federal court in Los Angeles.

NVIDIA held their annual conference this week, and Jenson spoke for like 2 hours. Here’s a 12-minute supercut of his biggest announcements and interesting things happening at the forefront of AI.

👔 Connect with me on LinkedIn: Overnight Success, Will Richards

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