Don’t build your defence start-up in Queensland

I relocated on the LAND 400 (Phase 2) vehicle upgrade program with Rheinmetall, working in Ipswich.

That program is delivering 218 Boxer combat reconnaissance vehicles built right here in South-East Queensland – a fantastic opportunity to move back to Australia and work on an amazing program.

Since then, the program has been subject to cutbacks, with numbers halved – along with LAND 400 (Phase 3), the AS21 Redback – a well-documented downscaling of our land capabilities that I won’t go into here.

Three years ago I left Rheinmetall to start my own company, and I’ve been on my own start-up journey ever since, based at The Precinct in Fortitude Valley, a government initiative that has just been defunded and will close at the end of the year. For those familiar with the founder’s journey, we are very much a “valley of death” company.

Defence typically involves long procurement cycles and heavy bureaucracy, making it harder for new companies to enter the space.

There are accelerators and funding pathways – like the Advanced Strategic Capabilities Accelerator and the Sovereign Industry Development Fund (SIDF) – but they’re hotly contested, and SIDF, in particular, is tightly focused on specific operational requirements.

VIEW ALL

Start-ups are not SMEs

I want to reiterate a point I made last year: start-ups are not small and medium-sized enterprises (SME). You’re not even a viable business until you hit recurring revenue and profitability, which could be years away.

So how do you get started? Software is an obvious play – a laptop, Wi-Fi and some knowledge of coding agents can get you a long way – but it’s competitive, and software-as-a-service is still something of a dirty word in defence.

Defence was traditionally not seen as a desirable asset class, but that’s changing. Hardware has become more attractive as a moat, and with increased spending in the US and Europe, more investors are waking up to defence as a good asset to hold.

I decided to focus on hardware, and Astute Systems was born. With support from Advance Queensland (a $75,000 Ignite Spark grant) and access to incubator office space at The Precinct, we felt well supported and part of a community.

We spent our first two years building and chasing VC funding. We launched the GXA-1, an embedded AI computer, at Land Forces 2024, and in 2026 launched our second product, BushNET.

Our raise was unsuccessful. Why? I think we were too early and by the time we had traction, we were carrying too much debt. We switched to angel networks in late 2025, where we were well received, but couldn’t agree on term sheets because of that debt.

To date, we’re still bootstrapping. I’ve spent my life savings and sold my house to keep the business going. It’s been stressful, but I remain committed. We have skin in the game – a phrase VCs love to hear.

Looking back, there have been some great initiatives and a few setbacks. Here’s what you need to know if you’re considering Queensland for your defence start-up.

Federal programs

Start with federal programs. Austrade is an outstanding federal initiative. Within our first three months in business we were exhibiting at Eurosatory in Paris, and we’ve just completed our second visit to the show. Exhibiting costs are covered by the government and the support is excellent – find out more about Team Defence Australia.

At the state level, engage with the Australian Industry Defence Network first. The Queensland chapter is the closest thing we have to a community.

Defence Industry Network

Connect with the Defence Industry Network. These are free events and a good opportunity to network with veterans in the state. Find your state chapter and events on LinkedIn.

Queensland claims defence is a priority, alongside biotech and agtech, but support is limited. Defence Jobs Queensland does exist and runs a newsletter, and there is state representation at some shows, but it’s pay-to-play. Expect your EOI to be knocked back if you’re not already known to them or if you’re early-stage – it can feel like an established-players-only club, which has been a source of disappointment in our early years. Show representation is also limited, with no Queensland presence at events like ADSTAR, where other states are prominent.

Trade and Investment Queensland

Overseas, you’ll get much better support from Trade and Investment Queensland. They have offices overseas and full-time staff to support your international expansion – definitely worth reaching out to. If state representation is present at an overseas event, though, don’t expect much beyond a photo opportunity with the deputy premier.

State grants such as SIDF are hotly contested and, as a result, a mess. Our application took over eight months from submission to rejection. Being told six months in that you’re essentially planning for two possible outcomes – as if the Australian Defence Force will simply wait – was insulting. In the final six months we weren’t allowed to update our application with new wins or contract awards, so we were assessed on outdated information. A truly poor experience, and one I hope isn’t repeated for others.

The state has also withdrawn funding for initiatives like The Precinct, our home for the past few years. It provided support, events and facilities for start-ups, and its closure has left the community scrambling for alternative space. The Precinct helped launch companies, including Hypersonics, Clipchamp, Floodmap and many others over the years. Its loss is another significant blow to start-ups looking for a base and a community.

Advance Queensland

It’s worth acknowledging Advance Queensland, who have supported start-ups in this state for many years. We’ve received mentoring and support through programs run out of The Precinct, and we’re currently on the Ignite Scale program. It’s a genuinely valuable initiative, which makes it even more concerning that the future of these programs could also be in jeopardy given the broader pullback in state support.

Start-ups are also routinely excluded from export and manufacturing grant support because of the two-year rule. Many of these programs require a minimum trading history – often two years – before a business is even eligible to apply.

Government support tends to be risk-averse, so there is genuinely a lot of it out there, but it’s built for established businesses with a track record, not for early-stage companies still trying to reach that point.

For defence start-ups already navigating the valley of death, this creates a catch-22: the grants designed to help you grow are the very ones you’re locked out of until you no longer need them most.

A difficult but resilient journey

One year after my original article on building a defence start-up in Queensland, I reflect on a difficult but resilient journey. Having left Rheinmetall’s LAND 400 program to found a hardware-focused defence start-up, we launched two products (GXA-1 and BushNET) but struggled to close a VC raise due to early timing and accumulated debt, eventually turning to bootstrapping – sinking all my savings into the development – to keep the company alive.

Key takeaways for founders considering Queensland:

• Federal support is strong: Austrade and Team Defence Australia provide excellent, well-funded pathways to international exhibitions like Eurosatory.
• State-level community exists but is thin: the Australian Industry Defence Network (Queensland chapter) and Defence Industry Network offer useful, low-cost networking.
• State government support is weak and inconsistent: despite naming defence a priority sector, Queensland’s grant processes (e.g. SIDF) are slow, poorly run, and favour established players; show representation lags other states; and overseas support, while present, is largely symbolic.
• A major blow: state defunding of The Precinct, the start-up hub that supported my company and others like Hypersonics and Clipchamp – removes a key piece of Queensland’s start-up infrastructure just as it’s needed most.
• A structural catch-22: export and manufacturing grants often require a minimum trading history (commonly two years), locking risk-averse government support behind eligibility rules that only established businesses can meet – leaving start-ups without help precisely when they’re stuck in the valley of death.

Final thoughts

Australia’s federal-level defence support is genuinely excellent – and needs to be, to compete on a global stage – but state-level backing has gone backwards over the past year, making it a harder environment for early-stage defence start-ups than it was before.

As a defence founder, I’d welcome any opportunity to engage with the state on initiatives to improve the current environment for start-ups in general, and especially in defence, where support is severely lacking.

It’s rumoured that a new state development plan is set to be announced to support start-ups and innovation in Queensland – but having been burned before, I’m not holding my breath.

Ross Newman is the founder and chief executive officer of Astute Systems.