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SEA startup funding hits six-year low in H1 2025: report
Startup funding in Southeast Asia dropped to its lowest level in over six years in H1 2025, with equity investments falling 20.7% year-on-year to US$1.9 billion across 229 deals, according to a report by DealStreetAsia and Kickstart Ventures.
Singapore remained the top fundraising market, accounting for almost US$1.2 billion, but saw deal volume fall nearly 44% year-on-year.
Indonesia’s startup funding fell 67% to US$78.5 million, while the Philippines overtook it with US$86.4 million raised.
Vietnam’s startup funding rose nearly 169% to US$275 million, and Malaysia doubled to US$196 million.
Early-stage deals fell to a six-year low, but late-stage funding rebounded 70% to US$756 million.
Three companies—Malaysia’s Ashita Group, Singapore’s Thunes, and digital asset bank Sygnum—became unicorns, bringing the region’s total to 58.
Fintech led sector activity with US$631 million raised, though both deal volume and value were at six-year lows.
🔗 Source: Kickstart Ventures
🧠 Food for thought
Implications, context, and why it matters.
Southeast Asia’s funding drought reflects dramatic reversal from peak investment years
- The current funding environment shows how dramatically the Southeast Asian startup landscape has contracted from its peak years.
- H1 2025 funding of $1.85 billion across 229 deals represents a decline from 2017, when startups raised $6.5 billion by September alone, with over 500 deals projected for the full year2.
- Deal volume has similarly decreased, with 2017 recording 524 deals compared to just 229 in the first half of 20253.
- This represents a significant decline in funding levels compared to the region’s peak investment period, indicating the startup ecosystem has entered a prolonged reset phase rather than a temporary downturn.
- The contrast is particularly stark when considering that 2017’s funding surge was driven by mega-rounds like Grab’s $2 billion Series G and GO-JEK’s $1.2 billion Series C2, while today’s environment sees investors being far more selective with capital deployment.
Capital concentration in late-stage deals signals investor flight to quality
- The funding data reveals a clear bifurcation in investor behavior, with capital flowing predominantly toward proven late-stage companies while early-stage funding experiences severe contraction.
- Late-stage funding surged to $756 million despite comprising only 10 transactions, indicating investors are making larger bets on fewer, more established companies1.
- Meanwhile, early-stage transactions fell to 219 deals—the lowest level in six years—as investors raised the bar significantly for younger companies1.
- This pattern reflects a shift toward prioritizing startups with “clear paths to profitability and strong fundamentals” rather than growth-at-any-cost models4.
- The median late-stage deal size rose to $60 million, demonstrating that capital is concentrating behind businesses with scale and credible exit strategies, while early-stage companies face scrutiny for capital efficiency and viable growth models1.
