Aussie start-ups attract record funding

By Cameron Micallef

February 03 2021
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Despite the COVID-19 recession, Australia saw a continued rise in venture capital funding in 2020, new research has revealed.

Stats collated by KPMG, which captured investments in start-ups across the world, found that investors put US$1.6 billion into 227 Australian venture capital deals.

While this is slightly down from last year’s record 285 deals, KPMG’s head of high growth ventures, Amanda Price, said the sum of money raised is a signal that global and local investors remain eager to fund Australian innovation.

“The new dynamics driven by the global pandemic have accelerated digitisation across many industries. This rapid change creates opportunities for disruption, and investors see potential in Australian start-ups to build great companies and deliver strong returns,” she said.

According to KPMG, the big winners were "dynamic businesses".

“Alongside later-stage rounds for well-established Australian start-ups like Canva, Go1 and Volt Bank – we are also seeing investment in new areas of technology such as plant-based foods, with v2food’s Series B one of the top five deals of 2020,” Ms Price said.

“Each of these deals is more than just a number – it represents a dynamic business that is creating new jobs and fueling the growth of Australia’s future economy,” she added.

Globally, it was a year of two halves with the virus initially putting pressure on the market.

However, uncertainties related to the global pandemic, the November US presidential election, Brexit and the ongoing trade tensions and geopolitical issues did not slow the market in the second half, with Q4 results recording US$80.8 billion in investments.

“In what was a globally tumultuous year, Australia’s start-up investment environment remained robust. Many of our leading VC firms continued to raise record levels of funding from private and institutional sources. With this capital at their disposal, there remains much dry power within the system,” said Ms Price.

“Despite the events of 2020, founders enter 2021 with every opportunity to secure the funds they need to fuel rapid growth.”

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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