Melbourne entrepreneur Sam Kroonenburg sold A Cloud Guru for US$2 billion in 2021 after six years of building. His second company, advertising AI startup Cuttable, is growing more than twice as fast — with a fraction of the team. On 22 October it announced a $20 million Series A led by Airtree Ventures, counting lululemon, Cotton On and Kathmandu among its 440 customers, and Kroonenburg told Forbes Australia he expects revenue to jump 2,000 per cent this calendar year.
Cuttable is not an outlier. It's part of a pattern that a major new study from AWS has now put hard numbers on — and the implications for established businesses should keep every founder and CEO up at night.
The numbers behind the AI-native advantage
The AWS "Engines of Growth" report, conducted independently by Strand Partners, surveyed more than 3,400 startup founders and senior leaders across 20 countries. Its central finding: AI-native startups — companies under five years old that build products with AI at their core, not bolted on afterwards — are reaching billion-dollar valuations in 3.5 years, half the time and with half the staff it took before generative AI emerged.
The performance gap compounds quickly. AI-native startups are 5.2 times more likely to earn $1 million or more in annual revenue than startups overall. They increased AI spending by 46 per cent year-on-year (versus 35 per cent for other startups), and 98 per cent employ dedicated in-house AI talent. Seventy-two per cent have built proprietary AI capabilities such as custom models, compared with just 30 per cent of startups overall.
"The time and resources needed to build a world-changing company have decreased dramatically, and we're seeing a new generation of founders take full advantage," said Jason Bennett, VP and Global Head of Startups and Venture Capital at AWS.
Australia's AI-native breakout
The global data is striking, but the Australian examples make it real.
Kroonenburg's Cuttable uses AI to generate, test and optimise digital ads across Meta's platforms. He told Forbes Australia that the company "ships as much product, new capabilities, new features" as A Cloud Guru did "when it was an engineering team 10 to 20 times the size." Cuttable's own analysis of 280,000 ads and US$260 million in Meta spend found that only 1 per cent of ads earned half of all attributed revenue — and nearly half lost money. That is the kind of insight a small, AI-native team can extract from data that a traditional agency never could.
Then there's Heidi, the Melbourne-founded medtech startup that went from US$1 million to US$50 million in annual recurring revenue in just two years. In September it raised US$340 million at a US$900 million valuation (roughly A$1.26 billion), making it Australia's fourth unicorn of 2026. Heidi's AI Care Partner has supported more than 175 million patient visits across 190 countries — Blackbird, which owns 35 per cent, calls it their fastest-growing startup ever.
And globally, Airtree-backed Legora — a Swedish legal-AI platform — hit US$100 million ARR in less than 18 months and US$200 million six months later, faster than any enterprise software company selling through a direct sales team. Airtree partner Jackie Vullinghs told Forbes that one stealth startup went from zero to $1.8 million in revenue within four weeks, while another hit $5 million run rate in five months.
The catch: AI is concentrating success, not spreading it
Here's where the story gets more complicated — and more relevant to established businesses.
Blackbird founder Niki Scevak has warned that while cloud computing lowered barriers for entrepreneurs, AI is having the opposite effect for many. Startups that need proprietary models or AI infrastructure now need to spend far more, not less. "All of a sudden, the pendulum swung the opposite way," Scevak said. "That's expressed negatively in so much capital going into fewer and fewer startups, and the number of seed rounds going down over the last couple of years."
The data bears this out. According to Cut Through Venture, the median Australian seed round reached an all-time high of $6.1 million in Q1 2026, yet total small-round activity collapsed — just 31 sub-$5 million deals were cut in Q2, down from an average of 72 per quarter in 2024. Q3 recovered slightly to 49, but the trend is clear: more money is chasing fewer companies, and 81 per cent of investors say AI-first startups are priced higher than non-AI peers.
Vullinghs put it bluntly: "AI makes the best people dramatically better, and so the people who know how to use it the best are getting extraordinary outcomes. The average person using it in an average way is getting a meaningfully worse outcome."
This is the same dynamic we flagged when OpenAI's B2B data revealed a 3.5x intelligence gap between AI-forward companies and the rest. The gap is widening, and it's no longer theoretical.
What this means for your business
If you run a 10 to 50 person company, the AWS report isn't about startups — it's about your future competitors. The companies that will eat into your market share over the next three years are being built right now, by small teams that ship faster, learn from data faster, and reach global customers from day one.
The lesson from the data is not that every business needs to become a startup. It's that the strategic choice between "embedding AI at the core" and "bolting AI onto what you already do" has measurable, compounding consequences. AWS's head of startups Tiffany Bloomquist compared the current moment to the advent of cloud computing: good companies "lifted and shifted" their operations, making them slightly more efficient. Great ones completely re-architected.
Australia's track record here is not encouraging. We've previously reported that 88 per cent of Australian businesses use AI but only 10 per cent have actually embedded it into their operations. That 78-point gap between usage and integration is precisely the gap the AWS data says will separate winners from everyone else.
What to watch
Three things will determine whether this trend accelerates or plateaus.
First, watch the revenue-per-employee metric. If AI-native companies continue generating $400,000-plus per employee while hiring fewer people, the pressure on traditional businesses to match that efficiency will become existential — not just competitive.
Second, watch capital concentration. Blackbird just had its biggest quarter ever, deploying a record $297 million across 16 companies, with 42 per cent of early-stage capital going into AI infrastructure. When even Australia's most cautious investors are going all-in, the ecosystem is repricing around AI-native fundamentals.
Third, ask yourself whether your business is building AI in — or bolting it on. The difference between 156 per cent growth and 65 per cent growth starts with that strategic choice, and the compounding hasn't even begun.
Sources
- AWS Global Startup Trends Report — "Engines of Growth" — Amazon Press Center
- Some Startups Are Making Millions in Months Thanks to AI — Forbes Australia
- Cuttable Raises $20 Million in Funding Round Led by Airtree Ventures — AdNews
- Heidi Secures US$340M to Scale AI Care Partner Globally — Heidi Health
- Legora Raises $550 Million Series E at $8.8 Billion Valuation — Legora
- Cut Through Quarterly Q3 2026 — Australian Startup Funding Report — Cut Through Venture
- Blackbird Deploys Record $297M in Biggest Quarter Yet — Capital Brief
- Blackbird Closes Record $1 Billion Fund — Forbes Australia
