As the Australian technology ecosystem enters 2026, the outlook reflects both opportunity and constraint. Some segments are seeing renewed capital engagement and easing cost of capital, while others face tight liquidity and macro uncertainties. Innovation remains strong, but discipline and execution are paramount.
We asked founders and executives from leading Australian technology businesses to share their predictions for the year ahead.
Tight Early-Stage Markets and Macro Pressure Will Reinforce Discipline
Despite improved sentiment, early-stage capital remains tight. Liquidity constraints and a lack of meaningful recycling continue to shape investor behaviour, pushing the ecosystem toward profitability and sustainable growth.
According to Adam Schwab, Co-Founder and CEO of Luxury Escapes:
“In terms of early stage capital markets, funding I expect to remain tight as sponsors continue to focus on profitable businesses – exacerbated by a lack of liquidity and recycling of funds through the ecosystem.”
At the same time, macroeconomic conditions remain a meaningful variable for founders to navigate.
“From a macro sense, inflation is running rampant in Australia, caused directly by profligate state and federal government and an RBA who has been off the planet in reducing rates amidst massive fiscal stimulus. This will now likely lead to the RBA having to increase rates by 25-50 bips to make up for the massive miscalculation in 2025.”
Cheaper Debt, AI Reality Checks, and a StrongSetup for SaaS
As interest rates have declined over the past two years, debt has become meaningfully cheaper, reshaping how founders think about funding growth. At the same time, enthusiasm around AI is being tempered by execution challenges.
Sammy Michaels, Chief Financial Officer at Octopus Deploy, highlights this shift:
“Interest rates have dropped over the last 24 months, making debt cheaper and pushing investors away from low-yield cash into growth tech plays.
Meanwhile,AI is still a big hype driver, but after a year of trying, lots of companies are struggling to swap out solid SaaS setups with working AI versions, which shows how valuable proven products really are.
With more cash flowing and some uncertainty around AI, I see 2026 shaping up great for traditional SaaS, letting them expand on the cheap while AI startups figure things out.”
The implication is clear: predictable, high-quality SaaS businesses remain exceptionally well positioned in the current cycle.
AI Adoption Is Outpacing Governance
While AI adoption continues to accelerate, governance and control mechanisms are struggling to keep pace, particularly as agent-driven workflows scale.
Jess Flanagan, Co-Founder and CTO of Deckard, outlines the emerging risk:
“AI is exposing the limits of old traditional checks and balances. Human in the loop review is turning into a rubber stamp because agent driven workflows generate far more actions than humans can meaningfully check.
Shadow AI is spreading in many companies because the tooling is easy and staff move faster than governance teams.”
Looking ahead, expectations on vendors and platforms will shift materially.
“In 2026 companies will accept that policies do not control real workflows and will expect their vendors to deliver granular, data centric controls that enforce rules across the systems their agents touch.
Early vendor responses will be messy and incomplete, but pressure from incidents, audits, and internal risk teams will keep rising.”
Infrastructure, Finance, and the Next Wave of Innovation
Beyond software, several contributors see meaningful developments across financial services, infrastructure, and emerging technologies.
Jaimie Worth, Chief Financial Officer at Driva, notes:
“My outlook for 2026? The AI ecosystem continues to buzz, from AI native technologies through to data centers and dependencies on energy and rare earths. Australia's big banks are ever present in the headlines, likely with compressing valuations. And we'll see intriguing developments in the quantum computing space.”
Capital Will Be Available, But Only for the Best Performers
The reopening of capital markets does not imply a return to the previous cycle.Instead, funding is concentrating around companies that can demonstrate scale, efficiency, and control over their own trajectory.
As Kal Jamshidi, Managing Director at Mighty Partners, puts it:
“Fewer rounds, but the ones that do close will be materially larger. Companies will continually run leaner and hit revenue milestones earlier.
Capital will concentrate around the companies performing on top. Those teams will choose their investors, structures, and timelines. Everyone else will feel the squeeze.
We’ll see more $100M+ raises, but don’t expect matching IPOs. Money’s flowing in faster than it’s coming out. Without a bold local listing, Australia’s best tech may scale and exit offshore. Australia does the work, but the pay off goes offshore.”
This bifurcation between top-tier performers and the rest is already evident. Strong businesses are regaining leverage in negotiations, while others face a far more constrained funding environment.
Trust, Verification, and the Next Phase of Financial Innovation
As AI becomes embedded in everyday financial decision-making, the challenge is shifting from access to trust. While consumers have more tools and information than ever, confidence in what is reliable and regulated is becoming harder to maintain.
Ciara Conway, General Manager, Super at Stake, highlights the implications of this shift:
“In 2026, the real shift won’t be more AI, but a reshaping of trust. As AI tools move into everyday money decisions, Australians will have more guidance at their fingertips than ever before, yet far less certainty about what they can rely on. A gap in regulated advice has already pushed many towards unverified sources, and AI will widen that exposure before it helps close it.
The next phase of innovation will be about verification, not volume. Providers that pair accessible digital experiences with guardrails, transparency and compliant information will set the standard and be the ones who earn lasting trust as the system evolves. As consumers become more confident, we’ll see more self-directed investors.”
A Broader Economic Turning Point?
Zooming out further, some see 2026 as a potential inflection point for Australia’s economic direction.
Ben Buckingham, Founder & CEO of Primary, reflects:
“A hope as much as a prediction: that 2026 will be the year Australia finally confronts four years of negative per-capita GDP growth and decides to act.
We'll shift focus to productivity to drive better standards of living for all. We'll launch a focused policy agenda to unlock huge investment and back innovation and infrastructure at scale. This shift will prioritise research and commercialisation (including in AI), as a core economic capability.
2026 will be the turning point where Australia commits to rebuilding productivity and reclaiming its position as a competitive, future-focused economy.”
Looking Ahead
Taken together, these perspectives paint a clear picture of the year ahead. Capital is returning, but selectively. Proven models are being rewarded. Structure and discipline matter. And founders who plan ahead, financially and operationally, will have a meaningful advantage.
2026 is shaping up not as a return to excess, but as a more durable, thoughtful phase of growth for Australian technology.
