The New Zealand Men’s Sevens will face Fiji in the men's semifinals early on Monday morning with the winner to play either Australia or South Africa in the final.
Women’s coach Cory Sweeney said the defending champions were 'hugely disappointed' and said Australia bounced back well from their 12-19 loss to Fiji in their final pool game.
New Zealand, also the reigning Olympic champions, were not quite on their game, they had turned over ball and Australia took their chances, and they hadn't been able to finish a chance they had, he said.
"It's fine margins and we just weren't good enough to finish the game tonight," he said.
"I felt like we turned over the ball a fair bit at the breakdown and lost that battle a little bit. When you turn over ball and you're in unstructured situations it's really hard to scramble d [defence] from there. The girls did a valiant job trying to do that.
"It's a good Aussie team and they managed to hold their width really well and they exposed us a couple of times on the edge," he said.
Sweeney said they were proud New Zealanders and they would regroup overnight and come out ready for their bronze medal game on Monday (NZT).
New Zealand led 12-5 at halftime after tries to Theresa Fitzpatrick and Portia Woodman and a conversion to Tyla Nathan-Wong, but Australia's Maddison Levi backed her first-half try with two more in the second to set up their 17-15 win.
Earlier, New Zealand beat England to top their pool. They led 21-7 at the turn and scored 17 unanswered points in the second half for their 38-7 win.
Michaela Blyde scored two tries while Shiray Kaka, Sarah Hirini, Risaleaana Pouri-Lane and Jazmin Felix-Hotham scored one each. Nathan Wong landed three conversions and Pouri-Lane one.
Australia will play Fiji for the gold medal.
The New Zealand Men's Sevens qualified for their quarterfinals with a 20-0 win over England, their win made easier by poor English discipline at the breakdown. Several times the English infringed and New Zealand used their chances well, especially in the second half when running in 15 points.
Caleb Tangitau and Joe Webber crossed early before newcomer Che Clark made a big impression with two powerful tries when given seven minutes of action.
Against a Kenya side that pushed Australia hard in their pool game before they went down 5-7, the All Blacks got out to a 12-0 lead at halftime and then added 19 second half points while keeping Kenya scoreless.
Regan Ware scored twice while Scott Curry, Dylan Collier and Ngarohi McGarvey-Black scored one each with McGarvey-Black landing three conversions.