New Zealand raced out to a two-score lead against Australia in the semi-final thanks to tries from Mahina Paul and Stacey Waaka, but their opponents hit back to make it 14-7 midway through the first half.
The Black Ferns Sevens lost to Australia in Valladolid, Spain. Photo / Getty Images
Jorja Miller continued her excellent try-scoring form before the whistle to give the Black Ferns Sevens a 21-7 lead going into the half.
Australia crossed the try line quickly after the start of the second half, but an unconverted try from Risi Pouri-Lane in response made for a nervous final few minutes.
The Australians acted quickly and aggressively, scoring two converted tries to take a 28-26 lead in the final minute of the match.
The Black Ferns Sevens took the ball from the restart well, but Australia swarmed the breakdown and put too much pressure on them to handle and falling to their first loss since December, also to Australia.
The team will have the chance to go back to winning ways next week in Bordeaux where they have the chance to claim the World Championship crown.