Climate, health and people-related startups are getting an increasing slice of early-stage Australian investment according to new analysis of where venture capital is being deployed.
The report, Impact Startups Benchmark Report 2025. draws on data from Melbourne impact investor Giant Leap, and more than 2,800 startup deals over the past three years.
While total startup funding volumes fell overall, startups solving social and environmental challenges comprised 41.5% of all early-stage investment in 2024, above 38.9% in 2022, but a dramatic fall from 2023’s peaking of 55.6%.
Climate startups too the lion’s share of funding across the three years surveyed, scoring $1 billion in 2024, which more than double the investment in health and five times the figure for people-related ventures.
While the 97-page report doesn’t mention any specific investments, such as green hydrogen deep tech startup Hysata’s record $172 million Series B in May last year, it offers cumulative figures across the three areas analysed.
Rachel Yang from Giant Leap
Giant Leap partner Rachel Yang said the climate tech surge was attributed to strong corporate demand, regulatory tailwinds, and maturing technologies in areas such as carbon sequestration, energy storage and climate adaptation.
“With greater policy certainty following the recent federal election, we expect climate tech investment to continue gaining momentum,” she said.
“The government’s ongoing commitment to long-term clean energy targets and public funding is set to attract more institutional capital into climate-aligned assets, strengthening the sector and driving green jobs and innovation.”
“The fact that impact startups have steadily grown their share of early-stage investment, signals strong and sustained investor conviction in the impact sector. This resilience is a clear sign that backing startups solving social and environmental problems is more than a trend; it’s a long-term shift in capital priorities.”
Health investment in Australia remained steady in 2024, with biotech attracting the most capital reflecting sustained demand for new therapies, rapid advances in AI-driven drug discovery and strong return potential from breakthrough innovations as long-term drivers such as chronic disease and an ageing population continue to anchor growth.
Meanwhile edtech, human resources, and diversity and inclusion-related innovations saw a sharp pullback, reflecting investor caution around long sales cycles and tightening customer budgets, although the growing impact of artificial intelligence (AI) may drive new interest in areas such as education.
“We’re also excited for the potential of AI in tackling real human challenges,: Yang said.
“Today’s capital is flowing rapidly toward AI that monetises attention, often with little discernment between fleeting novelties and genuine solutions. But over time, we believe this trend will correct, and lead to some truly innovative and groundbreaking businesses.”
Giant Leap collaborated with Cut Through Venture to expand and enhance its data set.
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