LaunchVic’s closure has Victorian founders asking: should we stay or should we go?
Understanding why Victoria is restructuring startup support helps frame this decision. Here’s what the numbers say. NSW commands two-thirds of national venture capital with a US$55 billion ecosystem versus Victoria’s US$18 billion. Sydney ranks 25th globally for startup ecosystems. Melbourne sits at 32nd.
But those numbers don’t tell the whole story.
Victoria’s got strengths in deep tech, life sciences, and gender equity programs that matter. Queensland’s aerospace capabilities are world-class if that’s your market. South Australia has defence tech specialisations you won’t find anywhere else.
So the decision comes down to matching your startup’s needs against what each state actually offers. Ecosystem scale matters, sure. But so does funding access, infrastructure, talent pools, and operating costs. Sometimes sector specialisation trumps everything else.
We’re going to evaluate what each state provides for founders considering relocation. By the end you’ll know whether moving interstate makes sense for your stage, sector, and priorities.
How Does Victoria’s Startup Ecosystem Compare to NSW in Size and Funding?
Victoria’s ecosystem is smaller than NSW’s. Sydney’s startup ecosystem is valued at US$55 billion versus Melbourne’s US$18 billion.
NSW attracts roughly two-thirds of national venture capital. The concentration’s driven by Tech Central housing Canva (US$40 billion valuation), Atlassian, Block, and SafetyCulture.
Victoria captured 19% of total national funding in 2024. Victorian startups achieved $748 million across 130 deals—a 29% increase from 2023. That’s solid growth, but it’s still a fraction of what NSW commands.
Melbourne improved seven positions in global rankings recently, now sitting at 32nd compared to Sydney’s 25th. The momentum’s there. Victoria’s ecosystem includes unicorns like Airwallex and Culture Amp, proving you can build at scale without being in Sydney.
Here’s something the raw numbers don’t show—capital efficiency. Melbourne startups often achieve comparable outcomes with less funding than Sydney counterparts. You can do more with less in Melbourne.
If you’re building something that needs the largest possible capital pool, NSW has the advantage. If you’re capital-efficient and sector-focused, Victoria’s smaller ecosystem might work just fine. The size difference matters less when you match it against what you’re actually building.
What Startup Funding Programs Does Each State Currently Offer?
Victoria shifted from LaunchVic’s grant model to Breakthrough Victoria’s $2 billion fund focusing on deep tech, life sciences, and advanced manufacturing. It’s an equity investment approach with co-investment requirements. You need private capital to match.
Before consolidation, LaunchVic facilitated $239 million in private capital flow and supported 8 new venture capital funds. It completed over 190 investments with 6 exits. LaunchVic’s legacy and closure marks a significant shift in how Victoria supports startups—that ecosystem-building work now gets absorbed into Breakthrough Victoria‘s structure. For details on Victoria’s current program offerings, see our transition timeline guide.
NSW runs MVP Ventures offering $50,000 general grants and $75,000 grants for underrepresented groups. They’ve got StartupNSW programs, Tech Central access, and co-investment through state funds.
Queensland raised $417 million in FY2025. The Advance Queensland program provides grants, accelerator partnerships, and sector-specific initiatives.
The shift across states is from grants to equity investment. The National Reconstruction Fund has $15 billion to invest across seven priority areas including defence, renewables, and transport. It’s available nationally, reducing your dependency on state-specific programs.
Some NSW programs require NSW incorporation or physical presence. Others are accessible remotely. Federal programs like the National Reconstruction Fund don’t care where you’re based.
Worth noting—the Victorian government is cutting Breakthrough Victoria funding by an average of $90 million per year over four years. That matters if you’re counting on Victorian government support long-term. For a comprehensive breakdown of Victoria funding sources, see our dedicated funding guide.
How Do State Infrastructure and Innovation Precincts Compare?
Tech Central spans 6 square kilometres as the largest innovation precinct in Australia. It houses Atlassian, Block, Canva, SafetyCulture, UTS, and the University of Sydney. The Sydney Startup Hub is relocating into Tech Central later in 2025.
Tech Central creates network effects through sheer concentration. High-density technology businesses in one location create serendipitous connections and access to talent that’s already in the area.
Victoria took a different approach with specialised precincts. Parkville biomedical precinct hosts life sciences leaders with mRNA manufacturing capabilities. If you’re building in biotech, Parkville offers infrastructure you won’t find in Tech Central.
Melbourne’s Clayton innovation corridor focuses on advanced manufacturing and research linkages for hardware and deep tech ventures.
Infrastructure type matters by sector. Biotech needs Parkville’s lab space and hospital integration. SaaS benefits from Tech Central’s networking and corporate access. Hardware ventures need Clayton’s manufacturing capabilities.
NSW benefits from Cicada Innovations supporting hardware and biotech ventures with lab space and specialised equipment.
The concentrated model (Tech Central) versus distributed model (Melbourne’s specialised precincts) creates different opportunities. Tech Central gives you everything in one place. Melbourne’s precincts give you deeper sector-specific capabilities but require knowing which precinct matches your needs.
Which States Lead in Supporting Women-Founded Startups?
Victoria had the Alice Anderson Fund. That’s past tense because its future under the LaunchVic-Breakthrough Victoria consolidation is uncertain.
The Alice Anderson Fund deployed $10 million in government funding matched by $30 million private capital. It made 43 investments including Elita, MoreGoodDays, TalkiPlay, and GonGlobal.
No other state has a direct equivalent at comparable scale. NSW has the Carla Zampatti Fund representing $10 million in venture capital with first round opening in 2023, but it’s structured differently.
Victoria led Australian states in funding women-led startups. Mixed-gender and all-women teams achieved 29% deal share. Nine percent of funding went to all-women teams, up from 3% in 2023.
NSW’s larger ecosystem means absolute numbers of women-founded companies are higher. But the percentage of capital going to women founders is lower.
Victorian women founders are concerned about losing dedicated fund access under the new structure. Moving to a larger ecosystem might mean losing targeted gender support that made early-stage funding more accessible.
The consolidation leaves a gap. Whether Breakthrough Victoria continues the Alice Anderson Fund’s focus remains unclear. The 43 existing portfolio companies continue receiving support through the transition, but new investments are uncertain.
What Are the Sector Specialisations and Strengths of Each State?
Victoria demonstrated strength in R&D-intensive sectors, particularly biotech, cleantech, and advanced hardware. The state hosts Airwallex, Culture Amp, and Seer Medical. Breakthrough Victoria invested in Quantum Brilliance and RayGen.
NSW’s ecosystem is diverse across all sectors with strength in SaaS, enterprise software, and fintech scale-ups. Sydney’s strength is breadth rather than depth.
Queensland is emerging in aerospace with companies like Gilmour Space Technologies achieving the first Australian rocket launch in 50 years. They’re building climate tech and advanced manufacturing capabilities.
South Australia specialises in defence technology, wine tech, and agricultural innovation. Western Australia focuses on mining technology and energy innovation.
Sector specialisation can outweigh ecosystem size. A biotech startup needs Parkville infrastructure regardless of Sydney’s larger overall ecosystem. An aerospace venture benefits from Queensland’s specific capabilities.
Match your startup sector to the strongest state ecosystem before worrying about overall ecosystem size.
How Do University Commercialisation Pathways Differ Between States?
RMIT Activator completed 117 investments as a university-affiliated program. It runs a 12-week program focusing on student and alumni ventures.
Breakthrough Victoria’s University Innovation Platform partners with seven universities. They’ve committed $59.5 million in matched funding with 38 unique opportunities presented to investment committees.
The BV Fellowship Program offers up to $150,000 per awarded startup for commercialising university research.
NSW has Cicada Innovations providing deep tech incubator facilities with lab space and specialised equipment. UTS and University of Sydney have established tech transfer pathways.
Queensland has QUT commercialisation programs and university-industry linkages for aerospace and engineering.
University pathways matter most for science-based startups. If you’re building pure software, the university connection is less relevant. If you’re spinning out research or need lab access, university commercialisation infrastructure becomes important.
What Are the Operating Cost and Talent Pool Differences Between States?
Sydney has the highest cost of living and office space. That affects your runway. Melbourne sits mid-tier—more affordable than Sydney but higher than Brisbane, Adelaide, or Perth. Brisbane, Adelaide, and Perth run 20-30% lower on operating costs.
P3 Software Engineer median salary in Australia is AU$138,000. That’s lower than the US at AU$228,100 but comparable to the UK at AU$143,000.
Sydney commands a premium on salaries. Melbourne salary expectations are lower, extending your hiring budget further. Brisbane, Adelaide, and Perth have even lower expectations but smaller talent pools.
Sydney benefits from an extensive STEM talent pool and leading university proximity. Melbourne has a strong university pipeline from Melbourne Uni, Monash, and RMIT. Queensland is emerging.
Melbourne has a reputation for quality-focused engineering. Sydney is known for scale-focused work. That’s generalising, but the cultural differences exist.
Remote work changes the calculation. You can hire talent nationally while maintaining a single-state base. That reduces the importance of local talent pools if you’re building a remote-first team.
Should Victorian Founders Consider Relocating Interstate?
The decision comes down to a framework: ecosystem scale, program access, sector specialisation, operating costs, network effects, and talent pool.
Relocation makes sense when sector specialisation exists elsewhere. If you’re building aerospace tech, Queensland’s ecosystem matters more than Melbourne’s larger general ecosystem. If the funding gap is unbridgeable in Victoria and you need Sydney’s capital concentration, relocate. If your talent needs exceed Melbourne’s pool, consider Sydney.
Staying in Victoria makes sense when you’re leveraging Parkville or Clayton infrastructure for deep tech or life sciences. If gender equity programs are important and the Alice Anderson Fund continues in some form, that’s a reason to stay. If you’ve got established networks in Melbourne that are valuable, and cost sensitivity is high, staying makes sense.
Partial relocation is an option. Maintain Melbourne presence while accessing Sydney capital and networks periodically. Some state programs are accessible without full relocation.
Network effects matter. You’re losing established Melbourne relationships if you relocate. You’re building new Sydney connections from scratch.
Stage-specific guidance: early-stage ventures benefit from lower-cost cities where runway extends further. Series A and beyond may need Sydney’s capital concentration. The later your stage, the more important capital access becomes.
Calculate the specific runway impact. Sydney costs typically reduce runway 20-30% versus Melbourne. Brisbane extends it even further. Your burn rate and funding timeline matter for this decision.
FAQ Section
Can I access NSW startup programs if I’m based in Victoria?
Some NSW programs require NSW incorporation or physical presence. MVP Ventures has specific eligibility requirements. Tech Central precinct access typically requires Sydney presence for co-location benefits.
The National Reconstruction Fund is available nationally regardless of state location. Contact programs directly with your situation.
What’s the difference between Breakthrough Victoria and the old LaunchVic programs?
LaunchVic emphasised grants and ecosystem building—events, networks, facilitation. Breakthrough Victoria focuses on equity investment in deep tech, life sciences, and advanced manufacturing.
The shift is from non-dilutive grants to equity co-investment requiring private capital matching. LaunchVic’s investment portfolio gets absorbed into Breakthrough Victoria management.
Which Australian state has the most venture capital activity?
NSW dominates with approximately two-thirds of national VC investment. Sydney’s US$55 billion ecosystem valuation reflects that concentration.
Victoria is second with 19% of national VC. Queensland is third with $417 million raised in FY2025. Capital concentration doesn’t tell the whole story—sector match and network access matter too.
How long does it take to access state programs after relocating interstate?
Incorporation requirements are immediate. You can establish an entity the same day. Physical presence requirements vary—some programs require operational proof like office leases and employees.
Network integration and ecosystem access develop over 6-12 months post-relocation. Precinct access may have waiting lists. Accelerator cohorts have specific intake timelines regardless of location.
Is Sydney’s larger ecosystem worth the higher operating costs?
Depends on your stage, sector, and capital requirements. Early-stage capital-efficient ventures benefit from Melbourne or Brisbane’s lower costs extending runway. Series A and beyond companies needing substantial capital may require Sydney’s VC concentration.
Sector specialisation can override ecosystem size. Biotech needs Parkville despite Sydney being larger. Calculate your runway impact—Sydney costs typically reduce runway 20-30% versus Melbourne.
What happens to the Alice Anderson Fund after LaunchVic closes?
The fund’s future under LaunchVic-Breakthrough Victoria consolidation remains unclear. The 43 existing portfolio companies continue receiving support through the transition.
Whether dedicated women-founder focus continues is uncertain. No direct equivalent program exists in other states at comparable scale. Monitor Breakthrough Victoria announcements for clarity.
Can I build a successful startup in Queensland or South Australia instead of Sydney or Melbourne?
Queensland’s aerospace ecosystem is emerging in Brisbane. South Australia offers specialisation in defence tech and wine tech with lower competition.
Success is possible in any state but ecosystem scale affects certain growth stages. Sector specialisation often matters more than ecosystem size—aerospace thrives in Queensland. Smaller ecosystems mean less competition for talent, government attention, and media coverage.
How do I evaluate which state is best for my specific startup sector?
Map your sector to state specialisations: biotech goes to Victoria, aerospace to Queensland, diverse SaaS to NSW. Assess infrastructure needs—lab space, manufacturing facilities, testing environments.
Evaluate the partnership ecosystem. Which corporates operate in which geographies? Analyse investor expertise—which VCs specialise in your sector and where are they based?
What’s the National Reconstruction Fund and does it reduce importance of state programs?
The federal fund has $15 billion to invest across seven priority areas: resources, agriculture, transport, medical science, renewables, defence, and enabling technologies. It’s available nationally regardless of state location.
It complements rather than replaces state programs. It reduces but doesn’t eliminate state program dependency for eligible startups.
Should CTOs prioritise talent pool or funding access when choosing locations?
Stage-dependent. Early stage should prioritise talent. Later stages may need capital concentration. Remote work reduces talent pool location dependency for pure software ventures.
Hardware and deep tech still benefit from co-located teams near specialised facilities. Consider hiring difficulty—Sydney competition is intense, Melbourne is balanced, Brisbane is emerging.
How does Melbourne’s talent pool compare to Sydney’s for engineering hiring?
Melbourne has a strong university pipeline. Melbourne Uni, Monash, and RMIT produce STEM graduates. Sydney has larger absolute numbers but higher competition from established tech companies.
Melbourne has a reputation for engineering quality and culture fit. Salary expectations are lower in Melbourne, extending hiring budgets further. Remote work means you can hire nationally while maintaining either city as base.
What are the risks of staying in Victoria versus relocating to NSW?
Staying in Victoria risks missing Sydney’s larger capital pool and network effects. LaunchVic consolidation creates uncertainty. The smaller ecosystem means fewer serendipitous connections.
Relocating to NSW risks higher operating costs reducing runway 20-30%. You lose established Melbourne networks and relationships. Higher competition for talent and attention exists. Relocation may be unnecessary for sector specialisations Victoria leads like biotech and life sciences.
Risk tolerance varies by startup stage, sector, and founder priorities. Partial relocation or bi-city presence can mitigate some risks both directions.
