Some startups are growing 2.4x faster than their peers
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AI-native startups are growing their annual revenue 240% faster than non-AI peers
Aussie AI-native startups are seeing average annual revenue growth of 156% - 2.4x higher than local startups overall, according to research from AWS. 60% of them generate over $400,000 in revenue per employee, double the rate of non-AI natives. As Jackie said, “AI makes the best people dramatically better, and so the people who know how to use it the best are getting extraordinary outcomes.”
Speaking of fast-growing AI-native startups, we’re delighted to be doubling down on our investment in Cuttable. The team have relaunched the platform to make ads learn from every flop and winner so performance marketers can make their content work harder. They’ll also be expanding their team in Melbourne, New York and San Francisco, so keep an eye out for open roles here.
Legora raises USD$550m Series E
6 months ago, we first backed Legora. It’s rare to see a company scale as quickly as they have while maintaining such a high bar for talent, product and execution. ARR rose from US$1m to US$100m in less than 18 months, then grew another US$100m in under 6 months. And it’s been especially great to see their Sydney office grow into the largest in the region. The opportunity in legal is enormous, and it’s still early days for Legora - onwards and upwards!
Metacognition raises $5m, bringing the pre-seed round to $15m
Proof that Australia can be more than a home for data centres, Metacognition’s latest open-source AI model for robotic navigation beat Alibaba’s and Mistral’s in simulated tests. It’s just one of the reasons why we’re excited to back Anton, Stephen, Paul and the Metacognition team as they turn cutting-edge AI into economic value in Australia.
Australian startups raised a record $4.2bn in the September quarter
If you go beyond the headline, ten deals accounted for 93% of the funding and announced rounds fell 25% from the previous quarter. This isn’t an Australian anomaly: Globally, Q3’26 funding reached an all-time annual high at US$698bn as deal count fell 23% QoQ. In news that won’t surprise anyone, much of this is attributed to AI, with nearly two-thirds of all announced rounds in Aus involving AI-first or AI-enabled companies.
Anthropic unveils US IPO filing as AI race intensifies
The company’s prospectus is a case study in extremes: Revenue grew 1,368% YoY in the June quarter and adjusted operating income swung to US$1.62bn, while a convertible bond charge pushed the half-year net loss to US$80.7bn. Investor valuation expectations sit between US$1.5 and US$2 trillion, either side of the US$1.75 trillion SpaceX fetched when it priced its record US$75 billion IPO in June.
Canva releases its first image generation model
The model, Canva Craft, is the company’s first in-house image generation model, built to compete with OpenAI, Microsoft and Google. It uses a two-stage architecture that allows it to plan a design before generating an image, so the text is legible and edits stay precise. It’s currently ranked 4th on Design Arena’s leaderboard for the best AI image generation models.
The question on everyone’s mind is: “Is the AI bubble about to pop?” And John tried to answer it at our recent LP Summit: Demand isn’t the problem, as token usage on OpenRouter is up more than 25x YoY. Timing is the risk. Hyperscaler capex will pass $1tn in FY27; it’s increasingly debt-funded and the repayments don’t fall evenly. That exposure mostly sits in the model and infrastructure layer, where there are enormous fixed costs, falling prices and returns that require keeping every GPU busy. That same price fall is a tailwind for apps; the revenue curves we’re seeing from portfolio companies in our most recent fund look nothing like those in our older vintages. Debt does give us pause, as long-term conviction doesn’t pay short-term debt.
At the start of the year, Jackie’s goal was to get AI to do complex work reliably by building skills, connecting tools and giving it enough context. Now that AI can use computers, she has dozens of agents running each day to find information that helps her make better decisions. If you assume everyone is doing this in six months, that’s a huge amount of activity moving from humans to agents. Who benefits from this? Well, Cloudflare have slowly been building out the infrastructure for an internet used by agents, not just humans. Stay tuned for her deep dive on Cloudflare on Substack by subscribing here.
As AI reshapes products and business models and companies from Australian venture’s early years reach maturity, we’re seeing a broader range of outcomes—including the harder ones. When a decade of work gets reduced to a negative headline, fewer people are willing to try. Elicia sets out what this generation of Airtree commits to: backing founders’ ambition, talking about what they built as well as what it sold for, being plain with our investors when something isn’t working and speaking up when the conversation drifts towards caution.
Archa, a fintech startup, raised $11m.
Coherence Neuro, a medical device startup, raised $64m.
Cuttable, an adtech startup, raised $20m.
Forward Deployed, a national security startup, raised $1m.
GonGlobal, a biotech startup, raised $1.2m.
Legora, an AI legaltech startup, raised USD$550m.
Metacognition, an AI neolab, raised $5m.
Metal, a stablecoin startup, raised $50m.
MP Space, a satellite batteries startup, raised $23m.
Qippay, a fintech startup, raised $4m.
R2Crete, a concrete recycling startup, raised $750k.
RedOwl, a fintech startup, raised $5.3m.
Skopos Bio, an oncology startup, raised $12m.
SupaHuman, an edtech startup, raised $2.1m.
Syncrowin, an industrial AI startup, raised $3m.
Trendspek, an infrastructure software startup, raised $6m.
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Jackie and Kate will be at The AI Impact Summit on the 5th November.
John will be in the US from the 15th-26th November.
James will be in Hong Kong for AVCJ from 16th-20th November.
Caitlin and Dan will be in Melbourne on the 17th November for our Pathfinders on Tour meetup.
Kate will be at Start-Up Tank #5 pitch night on the 19th November.
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