The Rise and Fall of Australia’s Tech Unicorns
In the boom years, Australian tech founders were hailed as heroes, with billions of dollars in venture capital funding pouring into the industry. However, the tide has now retreated, and valuations are down, with staff being laid off and companies struggling to stay afloat.
Behind it all is a fear that powerful new AI coding tools such as AI coding tools will make it easier for newcomers to replace the dependable streams of subscription revenue that these businesses thrived on.
The Challenges Facing SafetyCulture and Culture Amp
SafetyCulture and Culture Amp, two of Australia’s most promising tech companies, have been hit hard by the market correction. Both companies have seen their valuations slashed, with SafetyCulture’s valuation being written down by Blackbird Ventures, one of its major backers.
Culture Amp has also cut 6% of its workforce, its second round of layoffs since 2023, and posted a significant loss in its most recent financial year. SafetyCulture, on the other hand, has posted a $49 million loss, up from $35 million the year earlier, on revenue of $197 million.
The IPO Window: Closed or Just Delayed?
The question on everyone’s mind is whether the IPO window has closed for these companies. According to Daniel Petre, a veteran venture capitalist, the window to go public isn’t permanently shut, but recovery depends on whether these companies can prove their resilience.
Petre says that assuming they can, and overall SaaS valuations recalibrate up a bit, then late 2026 and early 2027 should see the IPO door open again. However, if it turns out that they struggle to show continued growth, and valuations do not recover much, then it would be fair to say they missed their chance to IPO at a decent valuation.
The Future of Australian Tech
So, what does the future hold for Australian tech? According to Rick Baker, a partner at Blackbird Ventures, both SafetyCulture and Culture Amp are now ‘real businesses’ that are mostly cash-flow positive.
Baker says that IPO windows open and close, and they still feel positive that 2026-27 holds good prospects for businesses with strong fundamentals. However, the challenge for these companies will be to prove their resilience and adapt to the changing market landscape, including the rise of AI native startups that are faster and more nimble.
Conclusion
In conclusion, the Australian tech industry is facing a challenging time, with two of its most valuable startups struggling to stay afloat. However, with the right mindset and adaptability, these companies can still thrive in the long term. As Sam Kroonenburg, co-founder of A Cloud Guru, says, ‘Timing exits is part judgment, part courage and part luck.’ Perhaps, with a bit of luck and the right strategy, SafetyCulture and Culture Amp can still achieve their goals and become the next Atlassian or Canva success story.