AI fever leaves SEA’s consumer startups fighting for attention

This is the second installment of a two-part series on how AI fever is changing the reality of fundraising in tech. You can read part one here.

An oil crisis, rising inflation, and a falling currency are just some of the headwinds that Indonesian firms have had to face in recent months. One of these companies is Yoona, an organic sanitary pad brand from the archipelago.

Instead of dropping prices, the firm is increasing customers’ basket sizes by offering more promotional bundles, Yoona CEO Susanna Angraini tells Tech in Asia.

Still, staying afloat and appealing to investors are two different challenges. Firms like Yoona say it’s become harder to raise funds.

Image credit: Ulla

In the past, being a consumer business in Indonesia alone was considered attractive to investors due to the country’s large market, Angraini says. The bar is now higher: “These days, they want to know if you can expand outside of Indonesia, too,” she adds.

While the startup has secured a lead investor for its ongoing pre-series A round, finding other backers has been trickier to do. Though its product line of sanitary pads is profitable, the firm is getting feedback that its pace of growth is too slow.

Other companies are casting their nets wider. As VCs tighten their purse strings on consumer startups, several firms have turned to other sources of financing like debt or angel investors and family offices, Kevin Wijaya, director of CyberAgent Capital, tells Tech in Asia. He didn’t specify which startups these were.

Waning investor attention for consumer plays

According to data platform Tracxn, funding for consumer startups has dropped from a high of US$6 billion in 2022 to US$580 million as of the first half of 2026.

Just four years ago, an e-grocery startup from Indonesia could raise US$120 million for a series C round. Tech-enabled coffee chains also raised good money: Kopi Kenangan raised US$96 million in 2021, following a US$109 million round the year prior.

Funds are increasingly being redirected to AI startups or in sectors adjacent to it. In the first half of 2026, Tracxn data shows that more than half of the total startup funding in Southeast Asia went to data center operator DayOne, which raised US$4.5 billion.

See also: SEA VCs diverge on paths to AI gold

In fact, as B2B startups get more investor attention, the next venture cycle of Southeast Asia will be focused on productivity and not consumption.

Historically, VCs investing in consumer startups in Southeast Asia have focused on high-growth digital businesses like ecommerce, fintech, and other consumer platforms. But such investments – which depend on the potential of a startup to gain significant market share – have become harder to underwrite, as it’s now more costly to acquire customers, says Melanie Tng, analyst at PitchBook.

VCs are optimistic

Pivoting is key

What VCs want