Australian startups are emerging as leaders in employee ownership amid a global slowdown in venture capital and IPO activity.
New data from Carta, a software platform built for private capital management, reveals that startups in Australia and New Zealand (ANZ) are outperforming not only regional peers but also the US in employee equity participation, highlighting the growing strategic importance of equity in today’s capital-constrained environment.
Carta’s first-ever Startup Equity & Workforce Report: APAC & ME analyzed data from private companies across the region. It found that ANZ startups allocate a median 12.6% of their total equity to employee stock option pools, which is higher than the APAC median of 10%. In 2024, 51.8% of these employee stock options were exercised in ANZ, surpassing the US rate of 32.2%, and far exceeding East and Southeast Asia’s 22.8%, as well as the Middle East and South Asia’s 14.5%.
The report also noted a recent pullback in hiring after a boom from 2019 to 2022, with startups across APAC and the Middle East experiencing higher employee turnover in 2023 and 2024. Initial equity grants to new hires have shrunk by over 30% since 2021, mirroring a global trend toward more cautious equity allocation.
Employee stock option pools tend to grow early in a startup’s life, from around 7% at the pre-seed stage to approximately 11% at seed stage, but generally stabilize between 11% and 13% in later fundraising rounds. Notably, ANZ startups maintain larger option pools compared to other regions.
Despite the tougher funding and hiring environment, Australia’s startups continue to demonstrate a strong pro-equity culture. Smaller equity grants are being offset by higher uptake and exercise rates, maximizing value for employees.
Bhavik Vashi, Managing Director of Carta at APAC and Middle East, emphasized the significance of these findings, “Australia is punching above its weight on employee ownership, and our latest data shows this trend is only continuing. Aussie founders recognise that giving employees a genuine stake in the business keeps teams motivated and committed, even when capital is tight.”
Recognizing the importance of accessible equity tools, Carta has launched Carta Launch in Australia, a free platform designed to help early-stage founders build clean, compliant cap tables and issue Employee Stock Option Plans (ESOPs) from day one. The platform targets startups with fewer than 25 stakeholders and less than USD 1 million raised, underscoring Carta’s long-term commitment to supporting early-stage companies. Globally, over 25,000 founders using Carta Launch have collectively raised more than US$24 billion.
Vashi highlighted the platform’s role in empowering startups, “They want to share the upside, but need simpler and more accessible ways to do it. That’s why we’ve introduced Carta Launch in Australia, putting robust, compliant equity tools within reach of every early-stage company. Now, Aussie founders can make ownership their strongest recruitment and retention advantage from day one.”
Read the full report here.
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