Sydney-based space power company MP Space has closed a $23 million seed round led by Blackbird Ventures, with Seraphim Space, the world’s most active space-focused investor, making its first-ever investment in an Australian company. Systemiq Capital, Speedinvest and MFV Partners also took part. It’s described as one of the largest seed rounds raised by an Australian deep-tech company to date.
Founded in January 2024 by former Tesla engineers Jay Manley and Sam Paterson, MP Space builds power systems for spacecraft, hardware already designed into more than 500 spacecraft and missions, with its first flight heritage expected in the final quarter of 2026.
“Our thesis is simple: the next generation of spacecraft will need a lot more power, and the space industry needs better ways to generate, store and manage it,” says Manley.
A pattern, not a one-off
MP Space’s raise isn’t happening in isolation. Over the past year, a string of Australian hardware and deep-tech startups have closed seed rounds well above the local median. Defence autonomy startup Breaker raised $9 million in seed funding led by Bessemer Venture Partners, a round reportedly three times the size of a typical Australian seed raise. Sydney quantum sensing startup Deteqt closed a $5 million seed round led by Main Sequence Ventures to scale diamond-chip manufacturing for defence navigation, after Main Sequence had already backed its $750,000 pre-seed round the year before. Robotics data analytics company Alloy secured $4.5 million in pre-seed funding led by Blackbird, with support from AirTree and US robotics investor Xtal Ventures.
The trend shows up in the broader numbers too. Hardware, robotics and sensor startups raised an estimated $303 million in the first quarter of 2026 alone, and according to Cut Through Venture’s Q2 data, Australian startups announced $1.7 billion across 64 rounds in the same quarter, with capital increasingly flowing into hardware, climate and robotics alongside AI.
Why now
Part of the shift is about where the capital itself is coming from. Major Australian VC funds have been raising record amounts this year: Blackbird closed a $1.05 billion fund, Square Peg closed $650 million across two vehicles, and Main Sequence, the CSIRO-linked deep-tech specialist fund, is currently targeting $400 million for its fourth fund. More capital sitting with funds that already have a deep-tech mandate means more of it eventually finds its way to hardware founders.
There’s also a view, reported by Forbes Australia, that investors are shifting money toward deep tech and hardware partly out of caution about software. With AI making it easier to build competing software products quickly, some investors worry it’s eroding the competitive “moat” that used to protect software startups, making capital-intensive, hard-to-replicate hardware businesses comparatively more attractive again.
Government co-investment has also played a quiet but material role. Several deep-tech founders have pointed to National Reconstruction Fund co-investment as a factor in closing private rounds, the logic being that government backing de-risks the investment enough to bring private capital to the table. MP Space’s own two years as a resident of the NSW Government-backed National Defence and Aerospace Hub at Cicada Innovations fits the same pattern, a structured, government-linked pathway from early-stage research support through to a fundable company.
The challenge that hasn’t gone away
None of this means the gap has closed. Deep-tech companies typically need $5 to $10 million in early funding and a further $20 to $30 million to reach commercialisation, a scale few Australian VC funds can write alone without breaching their own concentration limits. Industry commentary continues to describe a “valley of death” between early research grants and the point where a company can demonstrate enough commercial traction to attract serious private investment, a gap Europe has addressed more directly through dedicated deep-tech public-private funding vehicles.
For now, Australia’s answer looks like a combination of larger specialist funds, more international investors willing to write a first Australian cheque (as Seraphim Space has just done), and government co-investment programs designed to de-risk the earliest, most expensive stage of hardware development.
Blackbird’s Samantha Wong frames MP Space as a test case for whether that combination can work. “As space unlocks more use cases, MP Space is well-placed to seize the opportunity with an indisputable hardware advantage and deep software capabilities,” she says. “It’s an Aussie business redefining the global standard.”