VC assets under management rose 7 % to A$17 billion between December 2023 and September 2024, latest figures from the Australian Investment Council Private Capital Yearbook showed.
Total VC growth was one of the few shining lights in a year when total Australian private‑capital AUM stagnated at around $139 billion – leaving little good news for local markets other than relative lower rates of decline.
“Private capital fundraising held up better in Australia than all other regions except Europe, declining by 14% year over year to $13bn in 2024 while North America and Asia contracted by 26% and 49%, respectively,” said Australian Investment Council CEO Navleen Prasad.
2024 was a notable down year in terms of VC fundraising with aggregate capital raises dropping to their lowest level in a decade – a sharp decline from the immediate post-COVID boom.
But the Investment Council remains optimistic that this is more a sign of reverting to the pre-pandemic mean than the beginning of death spiral linked to sudden alarming spike in portfolio companies failing.
The Investment Council report said the drop in fundraising was largely due to lack of closes from the big fish — Blackbird, Airtree, Square Peg — leaving CSIRO’s Main Sequence Ventures to pick up the slack with its $450 million Innovation Fund 3.
Square Peg partner Dan Krasostein said there were positive signs of VC investment near the end of last year, though it’s been a turbulent year for the capital markets.
“Venture capital is a somewhat cyclical industry so it is not unusual to see a significant upsurge in the number of venture funds in strong markets and a decline in weaker market environments,” he said.
AI was, somewhat unsurprisingly, the biggest VC vertical of 2024 with a 49% growth in deal value up to $1.3 billion.
Krasostein said AI can be a gamechanger for early stage companies by democratising “access to low-cost open-source models that challenge the moats of legacy incumbents”.
Superannuation funds still dominate the field, but private‑wealth investors now supply 24 % of commitments to 2022‑24 vintages which is triple their share five years ago. Regionally, ANZ partners have lifted their stake in Australia-based investments from 49 % to 54 %, while Asia‑based investors doubled from 5 % to 10 %.
Real estate remains the single biggest single private capital bucket at $55.7 billion, yet AIC Yearbook data show AUM dropped 5.2 % in 2024, with infrastructure down 7.9 %. Rising rates have crimped valuations, pushing some partners toward floating‑rate private credit.
Elsewhere, CommBank data shows Millennials opened almost half of all business accounts last financial year while Gen Z account for 13%. Combined, under-45s made up 62% of new businesses, signalling a generational handover in the startup world.
CommBank Small Business Banking executive Rebecca Warren said the data showed Australian entrepreneurial spirit “is very much alive”, adding that the younger crowd is dominating their own niches.
“Gen Z and Millennials account for 72 per cent of all new businesses in retail trade, showing younger Australians are willing to pursue their passion despite the challenging environment this sector has faced and continues to tackle,” Warren said.
“Australian small businesses have dealt with many challenges over the last few years, and their resilience has never been more evident than in the way they’ve been navigating the challenging market, the impacts of the election, tariffs and changes to rates.”
Millennials are especially keen on property and services companies, adding to CommBank’s data about the 1981-1996 generation being the most active property investors early last year.
