The federal Industry Growth Program stopped accepting new applications last week, freezing access to grants up to $5 million for startups commercialising products. The pause hits hardware, medtech, and advanced manufacturing companies that rely on non-dilutive capital while they are still building revenue.
The Industry Growth Program, which has issued 1,000 advisory reports and up to $5M grants since 2023, stopped accepting applications last week. Federal budget cuts removed $102M in uncommitted funding. The pause hits deep-tech and industrial startups hardest, especially those building into National Reconstruction Fund sectors.
Arkeus closed a $25 million Series A at a $100m valuation, 7x its seed round two years ago. The Melbourne-founded drone AI startup is building a manufacturing facility in Queensland and expanding into the US and Europe. No public detail yet on sales headcount or comp structure.
NSW shadow minister Jacqui Munro has launched #StopTheTechTax targeting Labor's proposed capital gains tax changes. The campaign reflects growing sector concern that moving from the 50% CGT discount to cost-base indexation, plus a 30% minimum tax on real gains, could increase founder tax bills at exit and push talent offshore.
Melbourne defence tech startup Arkeus closed A$25M Series A led by QIC Ventures at A$100M valuation. The company builds AI-powered hyperspectral sensors for autonomous military platforms and has won contracts with the Pentagon and Australian Defence. Money goes to manufacturing scale-up in Queensland and US market expansion.
Two Australian startups closed funding this week: Harrison.ai raised $179 million for healthcare AI expansion into US and UK markets, while insurtech UpCover secured $19 million ($8m debt) at a $45 million valuation. Both are hiring, but the sales motion looks very different.
Reevo closed $80M from Coastal Ventures and Kleiner Perkins to build an AI-native revenue operating system targeting mid-market GTM teams. The company is betting fragmented sales stacks, averaging 10-15 tools per team, will give way to unified platforms. Founder team from DoorDash, Stripe, and Square.
Kim Teo says ending the 50% CGT discount will push startup founders out of Australia, making government support measures pointless. The 2026-27 Budget replaces the discount with inflation-adjusted gains taxed at minimum 30%, hitting employee equity and founder exits. Airwallex, valued at $5.5B with 100+ ANZ sales roles, built its team on equity comp structures now under threat.
Former Up Bank CPO Anson Parker and payments exec Sam Mendelsohn closed a $4 million pre-seed for XMO, an AI-native consumer finance startup. The Melbourne team is building product, applying for licences and hiring before a 12-month Australian launch. No sales org yet: this is founder-led pilot territory.
Budget 2026 tweaks R&D tax offsets while Ireland boosts credits to 35% and the US restores immediate expensing. Australian deep tech founders argue the changes miss early-stage hardware startups burning capital before revenue. Trust taxation changes add pressure.
Federal government increases venture capital tax incentive caps starting July 2027. ESVCLP fund size lifts from $200M to $270M, investee business assets from $50M to $80M. Startups stay eligible longer, meaning more funded growth, which means more sales hiring. Worth noting: caps haven't moved in 20 years.
Federal Budget 2026 overhauled R&D Tax Incentive from July 2028: refundable offsets now available to $50M turnover firms (up from $20M), $200M expenditure cap (up from $150M), and 4.5% rate increase for core R&D. Changes mean faster cash for early-stage tech startups hiring engineering and sales teams, though the $200M cap fell short of industry push to remove it entirely.