AI crowds out consumer plays in SEA

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In focus

• ​​With AI in the spotlight, consumer startups fight for VC attention
• Moonshot’s astronomical US$3.5 billion series F round

Hello reader,

It wasn’t too long ago when VCs in Southeast Asia were straying from tech bets in the region by investing in D2C brands for products ranging from activewear to cosmetics. Even coffee chains were all the rage, with large VC firms having at least one beverage brand in their portfolio.

But when AI exploded into the scene, VCs shifted their attention. In the process, some industries that were previously investor darlings have fallen out of favor.

Capital raised by consumer startups has dropped from a high of US$6 billion in 2022 to US$580 million as of the first half of 2026, data from Tracxn shows. In today’s Top Story, I dive into how consumer startups are adjusting their business models amid this new funding environment, and what VCs are now looking for before cutting a check for new players in the sector.

For many, Southeast Asia remains a ripe environment for consumer plays. After all, it’s home to emerging economies with growing middle-class segments and young populations. But now more than ever, consumer startups need to prove why they’re worthy of the VC money they seek.

Elyssa Lopez, journalist

Top Story

AI fever leaves SEA’s consumer startups fighting for attention

Image credit: Ulla

In the first half of 2026, over 50% of startup funding went to the data center and B2B sectors. With more investors turning their attention to AI, startups in other industries, especially those in consumer goods and services, have higher bars to clear before getting their dollars.

Trending news

1️⃣ Moonshot AI raises over $3.5b in series F: report

The Kimi chatbot creator is busy securing funds for its IPO, which is reportedly slated for late 2026 or early 2027. This latest round puts Moonshot AI’s valuation at US$35 billion.

2️⃣ US AI chipmaker Ambiq joins Singapore Exchange

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