The second annual edition of The State of Australian start-up funding report was released this week, showing that total investment was up about 30% last year to $7.4 billion.

The analysis, prepared by Cut through enterprise and Folklore Ventures, carried much good news for Founders with pre-Seed and Seed investments at record levels in 2022.

Fintech remains the most attractive sector for investors, worth $1.3 billion, but enterprise and enterprise software is growing strongly to reach a value of $1.2 billion by 2022, and sectors such as climate technology are also attracting more money.

Female founder participation reached an all-time high in 2022, but their share of funding fell to the lowest level in recent years.

Pre-Seed and Seed startups founded by women raised significantly more funding, and 23% of all deals included companies with at least one female founder. However, overall funding fell to 10% – from 21% in 2021 – and they raised a median amount that was 39% lower than for all-male teams.

The number of deals in 2022 exceeded 700 for the second year in a row, at 712 – only 19 fewer than the 731 in 2021.

Cut Through Venture’s funding report found that 88% of investors surveyed reported longer fundraising processes, with 61% taking longer to decide on investments even when strong investment readiness remained.

More than a third (35%) of investors surveyed reported that early deals were more competitive than ever.

The full report is available for free at australianstartupfunding.com

Report co-author Chris Gillings, founder of Cut through enterprise and partner in later stage VC fund Five V Capital, and Folkloric EnterprisesFounder and managing partner Alister Coleman joined Startup Daily editor Simon Thomsen at the Startup Daily show this week to discuss the key findings.

Click below to view the interview.

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