Southeast Asia VC in 2025: Is a breakthrough ahead?

Recently, I completed my first 21-kilometer mountain trail run in Sapa, Vietnam. Finishing it was an incredible feeling, not to mention the breathtaking views I took in along the way. However, I vividly recall a particularly challenging moment at around two-thirds of the route in which I experienced “hitting the wall.”

For runners, this is a tough phase: The body has depleted its glycogen stores, leading to extreme fatigue and a high chance of giving up. But once you push through it, the body transitions its energy system, and the experience becomes even more rewarding.

Throughout 2024, I felt that the Southeast Asia’s venture capital sector was experiencing its own version of hitting the wall.

Photo credit: Vertex Holdings

Many have asked me how bad the market really is. Industry insiders widely consider this year to be significantly more challenging than the past five, and some VCs have even dropped out of the race. Pessimism abounds, and few seem to look ahead with optimism.

Yet as I reflect on my journey since joining Vertex Ventures in 2010, I believe that despite its challenges, 2024 could prove to be a foundational year for building portfolios with the potential for strong returns over the next five to 10 years.

Beneath the market uncertainty lies a consistent pattern: Some of the best investments are made during periods of doubt and fear.

When the noise of market exuberance subsides, founders and investors alike can focus on long-term vision rather than chase short-term wins. With less pressure to deliver explosive short-term results, valuations become more reasonable, enabling sustainable growth.

They become true founders, driven by resilience and a determination to create lasting value rather than the short-term gains that often accompany market over-excitement.

Historically, we made some of our best investments – in companies such as Grab (2012), Patsnap (2014), and Nium (2016) – during times when optimism was subdued, and the landscape was free from overvaluation.

These environments allowed us to work with resilient founders focused on creating lasting value, a principle that continues to guide our investment strategy.

Focus on vision, return to rationality

In any economic slowdown, investors tend to become more cautious, often pulling back from the high levels of deal-making seen in boom years. The result is a less crowded market, which paradoxically can be an advantage.

During these quieter times, founders can dedicate themselves to building and refining their vision without the external pressures of excessive competition or hype-driven expectations. They become true founders, driven by resilience and a determination to create lasting value rather than the short-term gains that often accompany market overexcitement.

Dynamic market with diverse opportunities

A promising future with new challenges