In the boom years, Australian tech founders were lionised like surf champions riding a perfect swell. Billions of dollars sloshed through venture funds. Software-as-a-service companies selling things such as subscriptions to accounting or coding tools were valued at eye-watering amounts. The bankers who earn big fees listing start-ups on the public markets circled like seagulls over hot chips.
But they ate little. Some of Australia’s most promising tech companies deferred listing, happy to avoid the spotlight of the markets and tap deep-pocketed investors here and abroad for funding instead.
Now the tide has retreated, valuations are down and staff are being laid off. Behind it all is a fear that powerful new AI coding tools such as Claude will make it much easier for newcomers to replace the dependable streams of subscription revenue these businesses thrived on. And the question echoing through boardrooms, from Sydney to San Francisco, is blunt: did our unicorns wait too long?
Prominent venture capital investor Daniel Petre says the market correction for software companies has been brutal. “If you were a SaaS [Software-as-a-Service] company in good shape and initial public offering-ready in 2025 and did not list, then the door has now slammed in your face,” he says.
The big bright spot for Australian start-ups this year is Eucalyptus, which sold last week for $US1.15 billion ($1.6 billion) to a US-listed rival called Hims & Hers. But Eucalyptus was never in the software-as-a-service game; it sells weight-loss drugs such as Wegovy and Mounjaro.
And even then, Eucalyptus did not go public in its own right. Unease with the public markets, especially the local bourse, is clear in parts of Australia’s tight-knit start-up world.
There was one telling moment, in September last year. SafetyCulture founder Luke Anear was sitting on stage at the Tech Council of Australia’s annual summit in Sydney when the ASX’s head of listings, James Posnett, stood up from the crowd and made his pitch. The $165 million capital raising that SafetyCulture had spent a year grinding through in private markets, Posnett said, could have been done in “a day or two” on the public exchange.
Anear’s reply was instant: “Yeah, because the ASX has never been brutal on any company.”
The room laughed, but beneath the quip about the constant reporting requirements for public companies and harsh judgments of often short-term investors was something more uncomfortable. SafetyCulture, valued at $2.5 billion, has been building its workplace operations software for two decades. It is perhaps best known for its early safety checklist product.
Culture Amp, the Melbourne-based HR tech platform once valued at $2 billion, has been around since 2009 and lets companies survey their workforces anonymously. Their growth had been remarkable, and both were supposed to be the next chapter in the Australian tech success story – the heirs to Atlassian, the next Canva. Instead, both companies enter 2026 with new chief executives at the helm, depressed valuations and an initial public offering (IPO) window that looks as elusive as ever.
The leadership changes took the start-up sector by surprise. In November 2024, Anear stepped down as SafetyCulture chief executive after 20 years, handing the reins to Kelly Vohs, a US-based executive who had spent a decade running companies in the portfolio of the giant global asset manager Blackstone. Then, in January this year, Culture Amp co-founder Didier Elzinga made a similar move, shifting to executive chairman and installing former chief financial officer Caroline Rawlinson into the top job.
Together, the moves were striking: some of Australia’s most prominent unicorn founders stepping back before delivering the full cash returns their investors and early employees – who often accept lower salaries than they might get elsewhere in exchange for shares in the company – had waited years for.
In November, details leaked from an annual investor day for Blackbird Ventures and the picture wasn’t pretty for either unicorn, the term used to describe billion-dollar tech start-ups. Blackbird, which is the country’s largest venture capital firm and a major backer of both companies, wrote down Culture Amp’s valuation by 23.5 per cent. SafetyCulture was also marked down.
The write-downs came amid real challenges. Culture Amp had cut 6 per cent of its workforce – about 60 jobs – earlier that month, its second round of layoffs since 2023. SafetyCulture posted a $49 million loss for its most recent financial year, up from $35 million the year earlier, on revenue of $197 million.
Petre, the veteran venture capitalist, says the window to go public isn’t permanently shut, but recovery depends on whether these companies can prove their resilience. “Assuming they can, and overall SaaS valuations recalibrate up a bit, then late 2026 and early 2027 should see the IPO door open again. 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.”
Culture Amp’s new boss, Rawlinson, says her focus is firmly on the business rather than any IPO timeline. “An IPO is only one pathway to liquidity for shareholders, or source of growth capital,” she tells this masthead. “Culture Amp is cash flow positive and can self-fund our growth plans. Our focus is on continuing to grow the business and delivering industry-leading product innovations like our AI Coach.”
SafetyCulture did not make its chief executive available for interview, but a spokeswoman said that “we’re focused on building a generational company that has never been solely about software”.
”Our platform also spans hardware, consumables and insurance, so we believe we are well placed to navigate the future, regardless of the volatile nature of the public or private markets.”
In both cases external expectations seem to be shifting: from all-conquering economic powerhouses to, well, normal companies.
Blackbird partner Rick Baker says both companies are now “real businesses” that are mostly cash-flow positive. “In some cases we’ve already sold some of our holdings to other investors in the private markets,” Baker says. “IPO windows open and close, and we still feel positive that 2026-27 holds good prospects for businesses with strong fundamentals.”
When a company times an exit right (even after being on the markets), the results can be momentous. Nick Molnar and Anthony Eisen listed their buy-now-pay-later business Afterpay on the ASX in 2016 with a modest $25 million public offering. Five years later, they sold to Jack Dorsey’s Block in a deal worth $39 billion. One of the co-founders was a former investment banker. As one high-profile Melbourne-based venture capital investor puts it: “Knowing when to sell is a fundamental skill.”
Sam Kroonenburg, who co-founded cloud training platform A Cloud Guru and sold it to Pluralsight for $2 billion in 2021, says his decision to exit was more pragmatic than it might appear. “We knew markets were frothy and multiples wouldn’t stay there forever,” he tells this masthead.
But Kroonenburg resists the idea that he and his brother Ryan pulled off some perfectly calculated move. “Timing exits is part judgment, part courage and part luck,” he says. “Anyone who claims it is purely skill is kidding themselves. We were fortunate to exit when we did. I would not frame it as a masterstroke.”
He’s also sympathetic to those who stayed the course. “It’s easy in hindsight to say companies should have IPO’d in 2021. But founders are not trying to time markets, they are trying to build enduring businesses.”
What nobody anticipated, Kroonenburg says, was how quickly AI would reshape the landscape. “In hindsight, exiting near the peak of the SaaS cycle and starting again at the beginning of the AI era looks strategic, but it was not. That was luck.”
Anish Sinha, a former Goldman Sachs analyst and co-founder of insurtech Upcover, says the issue isn’t timing but competition. “The bigger threat is actually a new wave of AI-native start-ups that are faster and more nimble, and don’t carry the same legacy,” Sinha says.
In essence, observers believe AI tools such as Claude Code could let companies that are clients of software-as-a-service firms replicate their tools cheaply, or new upstarts undercut their pricing.
Meanwhile, Australian investors are voting with their feet. Data from trading platform eToro shows US equity holdings among Australian investors rose from 22 per cent in late 2023 to 37 per cent by the end of 2025, with one in three now expecting US markets to deliver the strongest long-term returns.
While SafetyCulture and Culture Amp wrestle with their path forward, the companies around them face their own challenges. Australia’s biggest privately held technology company, Canva, is positioning itself as a winner from AI – though its publicly listed peers such as Adobe and Figma are down 40 and 77 per cent, respectively, over the past year – as it holds off on a long-awaited listing. Airwallex, the fintech powerhouse valued at $12 billion, had been signalling an IPO, but an AUSTRAC compliance probe has complicated that timeline.
What’s clear is that the 2020-21 window – when capital was cheap, multiples were sky-high and investors would fund almost anything – was a golden opportunity. Afterpay and A Cloud Guru seized it. Others waited.
“There will be a time, most likely, that we will list, but I’d like it to be a bit further along,” Anear told the tech summit in September. The question Australia’s start-up ecosystem is wrestling with is whether “a bit further along” arrives in time.
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.
