Southeast Asia’s fintech startups collectively raised US$839 million during the first nine months of 2025 (9M 2025), reflecting a continued cooling trend in regional investment.

The total capital inflow marks a 39 per cent decline compared to the US$1.4 billion raised in 9M 2024 and a 56 per cent drop compared to the US$1.9 billion recorded in 9M 2023, according to the Southeast Asia FinTech Report by Tracxn.

Also Read: Fintech rebound: Singapore bags US$1.04B, outpaces global peers

Despite the overall contraction in funding activity, Singapore solidified its position as the central hub for fintech investments, capturing 84 per cent of the total funding raised across the region. Jakarta followed distantly, contributing 4 per cent of the region’s fintech funding.

The massive decline in overall funding was primarily driven by steep drops in investments across the seed and early stages. Seed-stage funding stood at US$62.3 million in 9M 2025, a reduction of 63 per cent from 9M 2024 and 64 per cent lower than 9M 2023. Early-stage investments fared similarly, totalling US$219 million, which represents a 66 per cent drop compared to 9M 2024 and 70 per cent less than 9M 2023.

However, late-stage funding showed stability. Late-stage investments held steady at US$558 million, matching the level seen in 9M 2024. This figure was still 45 per cent below the US$1.0 billion recorded in 9M 2023.

Mega rounds stabilise late stage

The stability in late-stage funding was supported by three significant US$100 million-plus funding rounds, up from two such rounds in 9M 2024. The notable mega-rounds recorded during the period included Thunes (US$150 million, Series D), Airwallex (US$150 million, Series F), and bolttech (US$147 million, Series C). These deals underscore strong investor backing for select growth-stage fintech players.

Investor participation remained active across all stages. DST Global Partners and Unbound were identified as the top late-stage investors, while Iterative, 500 Global, and 1337 Ventures were the most prominent investors at the seed stage. Peak XV Partners, OSK Ventures International Berhad, and Citi Ventures played leading roles in early-stage growth investments.

Acquisitions and public markets

The region recorded two initial public offerings (IPOs) in 9M 2025–Antalpha and TCBS–marking a 100 per cent increase compared to the single IPO seen in 9M 2024. The number of IPOs matched the two recorded in 9M 2023. Additionally, the fintech ecosystem saw the creation of one new unicorn in 9M 2025, consistent with the number created in 9M 2024.

Also Read: Is fintech in SEA changing its focus for further development?

Acquisition momentum, however, slowed down. Fintech companies in Southeast Asia recorded 13 acquisitions in 9M 2025, a 43 per cent drop compared to 23 acquisitions in 9M 2024. Strategic consolidation within the sector continued, with the highest-valued acquisition being KFin Technologies’s acquisition of ASCENT for US$34.7 million. This was followed by Titanlab’s acquisition of Coinseeker for US$30.0 million.

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In today’s linked world, people and businesses can’t succeed alone; they need to form partnerships and collaborate in order to accomplish shared objectives. Partners can promote innovation, solve challenging challenges, and generate positive change by combining their networks, resources, and skills. Partnerships of all kinds—between businesses, nonprofits, and the government—need open lines of communication, mutual respect, and a shared goal for the future in order to be effective.

Collaboration not only makes things easier to accomplish, but it also brings people closer together and fosters understanding and empathy. Cooperative efforts allow for the exchange of varied viewpoints and ideas, which in turn generates novel and original solutions. As an added bonus, when people pull together, it builds a support system of people and groups that can help each other out when times go tough. Collaboration is crucial because it allows individuals and organisations to create a greater impact when they work together.

This includes things like being able to make better use of resources, communicating more effectively, and increasing efficiency. By bringing together complementary perspectives, strong partnerships facilitate improved decision-making and problem-solving. In order to accomplish shared objectives and effect positive change in any setting, it is crucial to establish solid partnerships.

Benefits of partnerships

Facilitates thorough and fast resolution of complex issues that can be shared by project partners. Partners can have a bigger effect by pooling their resources. Partnerships also allow firms to share information and skills to solve problems more creatively. Partners’ resources and knowledge can lead to innovative solutions and long-term benefits.

Partnerships can help address social, environmental, and economic issues more sustainably and effectively. Collaboration allows businesses to build on their strengths and overcome their weaknesses, resulting in a more complete and effective problem-solving approach. This collaboration helps the partners and the communities and people they serve, creating a beneficial ripple effect. Partnerships can alter the world by sharing knowledge and experience.

Partnerships allow organisations to reach more stakeholders and have more influence, making it more feasible. Sharing resources and abilities can sometimes lead to innovative solutions that were previously impossible. These ties allow companies to work together to achieve goals and make a difference. If they collaborate, they can solve tough issues and create a more sustainable future.

Also Read: Grab supports digital currencies top-ups under partnership with Triple-A

This allows for more investments in research, development, and worldwide problem-solving solutions. Organisations can use their combined expertise and resources to have a big impact on society and the environment by working together. Partnerships allow companies to do more together than they could alone, creating a more successful and sustainable future for all.

Improved innovation and creativity

When organisations collaborate in partnerships, they are able to pool their expertise and knowledge, leading to increased innovation and creativity. By working together, different perspectives and ideas can be shared, sparking new approaches and solutions to complex problems.

This collaborative environment fosters a culture of continuous learning and improvement, driving organisations to push boundaries and think outside the box. Ultimately, improved innovation and creativity within partnerships can lead to groundbreaking advancements and breakthroughs that benefit society as a whole.

Things have the potential to bring about a revolution in various industries and to enhance the quality of life for people all over the world. We can move society toward a brighter and more sustainable future by embracing variety and supporting collaboration among partners. This can result in exponential growth and advancement on the part of society.

In the context of the global landscape, the opportunities for effective change become endless as firms promote diversity and teamwork. This presents the opportunity for a new era of invention and creativity to emerge. When brought together, different points of view have the potential to make a significant contribution to the creation of a better tomorrow for everyone.

Enhanced impact and reach

When organisations collaborate, they are able to harness their combined resources and experience to have a greater effect on a broader scale, thereby benefiting a greater number of individuals and communities who are in need. Because of this enhanced reach, it is possible to implement solutions in a more effective and efficient manner, which will ultimately result in a future that is more viable and equal for everyone. The potential for positive change is limitless, and it will inspire optimism and progress for decades to come if efforts to improve impact and reach are increased.

Working together, various organisations can reach more people with important topics and raise more awareness about them. It is possible to increase the impact of messages and the momentum of projects by pooling resources and working together.

In addition to bringing more attention to pressing problems, this has the dual benefit of inspiring more people to take action and build a better world for everybody. Teamwork has the potential to make a bigger difference than what any one person could achieve on their own, leading to long-term improvements for everyone.

Tips for building strong partnerships

Enhancing the visibility of a partnership through the utilisation of networks can serve to amplify the message and reach of the collaboration, thereby bringing more supporters and resources to the cause.

It is possible to have a greater impact and mobilise a larger group towards a common goal if one is able to reach a wider audience with shared objectives.

Also Read: Why partnerships are key to reduce environmental crisis impact in Asia

Partnerships have the potential to generate more support and engagement, which in turn can lead to more participation, funding, and overall success in the accomplishment of shared goals. By emphasising case studies of successful partnerships, businesses have the opportunity to gain knowledge from the methods and practices that have resulted in successful collaborations in the past.

Additionally, providing advice on how to form effective relationships, such as having open lines of communication, having values that are equal to one another, and respecting one another, can assist in guiding future attempts toward success.

In conclusion

Therefore, in order for companies to promote innovation, attain sustainability, and create an influence that will last, it is vital for them to cultivate solid partnerships. Organisations are able to construct partnerships that are founded on trust and mutual benefit if they adhere to best practices and get knowledge from many successful case studies.

A partnership has the potential to flourish and contribute to better success in the accomplishment of shared objectives if there is clear communication, a commitment to collaboration, and shared values.

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In Malaysia, the culture of overworking has become a widespread issue. Several reasons drive overworking: long working hours, the pressure to “always be available”, or the increased cost of living, which is taking a toll on the workforce. Malaysians find themselves sacrificing their time for work with little time to rest, often struggling with stress and burnout. This is evident as Malaysia is ranked the second most overworked country in Asia by 2023.

Some industries promote excessive work cultures, believing that pushing employees to their limits will yield better results and productivity. This remains one of the most common mistakes that managers make because while employees are always appreciated for putting in hard work, they do not draw a line between hard work and working extremely hard. This leads to decreased productivity, burnout, mental health issues, and strained family relationships.

As remote work has gained popularity since the COVID-19 pandemic, many have found it difficult to draw a line between work and personal life, and they always feel like they’re on the clock. A 2023 report indicates that remote job listings have risen by 8% in the previous year. Although remote work comes with its benefits, employees may have to be “always available”, which pressures them to respond to emails and calls at all times.

The problem with overworking in Malaysia

High living costs in areas like Kuala Lumpur force many workers to push themselves to make ends meet. Meanwhile, employees have to put in extra hours to secure promotions or to just keep their jobs in the competitive job market. Managers often see working overtime as increased productivity. Although research shows that overworking leads to reduced productivity and is prone to more mistakes, many companies are still promoting the overtime culture.

The solution lies in rethinking how and where we work. This is where co-working space comes in but how exactly can it help alleviate overwork in offices?

Flexibility and control over work schedules

Co-working spaces provide an alternative to both traditional and fully virtual office environments. They offer flexible work settings where individuals can rent desks or private offices, meeting rooms, and other amenities on a short-term or long-term basis. Co-working spaces are not just shared offices, they can offer a sense of community and collaboration which can directly address overworking.

Also Read: Can co-working spaces change Malaysia’s work habits?

Co-working spaces are built on the idea of flexibility, giving employees the freedom to choose when and how they work, effectively managing their time to reduce overworking. Employees can choose to work during their most productive hours, whether early in the morning or later in the day, without the constraints of a rigid 9-to-5 schedule.

WORQ offers solutions that can be customised and designed to suit companies’ frameworks and policies. For example, MNCs can utilise the hub-and-spoke model allowing employees to work from any WORQ outlet depending on their locations. This helps to reduce the pressure to conform to rigid office hours and encourages more sustainable and efficient use of time, leading to improved productivity at work.

It also fosters a community where businesses can connect and collaborate, opening the door to potential business growth. This support network gives businesses the resources they need to work smarter by leveraging one another’s strengths.

Work-life boundaries are clearer

One of the hardest parts of remote work is the blurring lines between professional and personal time. When your living room or bedroom acts as your office too, it can be hard to switch off from work, potentially leading to extended hours. Co-working spaces provide a clear physical boundary between home and work. Employees can mentally separate their work from their personal space when working in a dedicated office space.

This physical separation establishes a healthy work-life balance. When they leave the space at the end of the day, they can truly “clock out” and focus on personal or family time. This simple act creates a sense of routine and structure that are lacking in remote work.

Encouraging a result-oriented culture

In many traditional office environments, employees are judged by the hours they spend on their tasks rather than the quality of work they produce. This culture contributes to overworking, as employees feel the need to stay late or arrive early just to be seen as
dedicated. The goal is to work smarter, not harder and this shift helps employees manage their time effectively, reducing the need for excessive hours.

WORQ aims to break away from the “factory mindset” that equates physical attendance to productivity. They provide an environment where results matter more than the hours clocked in, allowing employees to deliver their best work without being confined to rigid schedules. Employees can choose to work at their preferred working schedule to maximise productivity,
in the morning or evening, as co-working spaces can operate 24/7 to accommodate business needs.

Also Read: How companies can manage data privacy in hybrid and multi-cloud work environments

Supporting creativity and comfort

Unlike traditional office spaces, co-working environments are designed to foster creativity and flexibility. Instead of sitting in a cubicle all day, employees have the freedom to move around and work in different areas of the space, choosing the environment that suits their mood or task.

At WORQ, we offer a range of professional amenities, including coffee and snacks, a printing station, telephone booths, and meeting rooms. For moments of relaxation, there are leisure facilities such as game rooms, sleeping pods, gym rooms, and a pantry. These amenities make it easier for workers to strike a balance between productivity and relaxation, reducing stress and preventing burnout.

The role of co-working in reducing overworking

By creating an environment that promotes work-life balance, encourages breaks, and focuses on productivity over hours, co-working spaces can play a crucial role in reducing the culture of overwork. As more Malaysians embrace this flexible way of working, there’s potential for a shift toward healthier work habits and a more sustainable approach to professional life.

Co-working spaces are not just an alternative office solution—they are a way to rethink how work is done. For individuals looking to break free from the pressures of overworking, co-working spaces provide a supportive, flexible environment that could lead to a healthier and more balanced future for Malaysia’s workforce.

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As artificial intelligence (AI) becomes more embedded in our daily lives, I find myself focusing more and more on trust. For me, trust is now just as crucial as innovation, especially when AI ventures into deeply personal domains like faith, wellness, and mental health. These are not merely technical fields; they are emotional, spiritual, and profoundly human.

Where AI meets the soul: Wellness, faith, and spirituality

I have watched and personally experienced how AI is intruding into areas once thought to be exclusively human. Whether it is mental health support or spiritual guidance, the technology is being tasked with empathy, nuance, and moral sensitivity.

• Mental health and wellness: AI tools now provide 24/7 counselling support, offering personalised meditation guidance, and even detecting early signs of mental health issues. For friends in remote areas who cannot easily access a therapist, these tools have been a lifeline. Some are getting daily emotional check-ins, or, as a caregiver, using guided AI breathing exercises to manage stress; these experiences are increasingly real.
• Faith and spiritual exploration: In my faith community, people are turning to AI for scriptural guidance, tailored prayer support, and spiritual reflection in safe, non-judgmental environments. For those far from traditional religious centres or hesitant to approach clergy, these tools provide new avenues for spiritual growth and exploration.
• Personalised wellness: I have also tried wellness apps that build custom fitness routines and nutrition plans, adapting to my evolving needs.  Although convenient and personalised, I am acutely aware they raise serious ethical as well as emotional questions.

The risks: When AI oversteps

Despite the appeal of personalisation and convenience, I am keenly aware of the risks that come when AI edges into life’s most intimate spaces. I can think of a few pitfalls:

• Harmful or inaccurate advice: AI often lacks human judgment, sometimes oversimplifying or misreading complex emotional or spiritual problems.
• Commodifying the Sacred: I worry about reducing spiritual growth or mental wellness to just algorithms. These journeys usually need real human connection, discernment, and community.
• Privacy and data sensitivity: Some AI tools gather deeply personal beliefs and struggles, raising pressing fears about data misuse or surveillance.
• Conflicting guidance: AI can unintentionally reinforce harmful ideas or contradict doctrine and best practices. Because it “feels” authoritative, this can be dangerous.
• Replacing human roles: Will AI gradually edge out therapists, spiritual leaders, or wellness professionals? The loss of human presence concerns me, especially where healing and personal growth are concerned.

Also Read: The real story behind AI project implementation: Why it’s not (just) about technology

My case study: Magisterium AI and the catholic church

I have extensively used Magisterium AI, a Vatican-endorsed tool to answer questions and learn about Catholic doctrine, Canon law, and Church teachings. Unlike generic chatbots, it is unique: every answer draws from a curated library of over 23,000 official Church documents, encyclicals, and scriptural references.

I trust Magisterium.com because:

• Its expert curation delivers doctrinal accuracy I can rely on.
• Every answer is transparently sourced; I can trace anything it says straight to an authoritative document.
• It has already been widely adopted by clergy, scholars, and lay people in over 125 countries and multiple languages.

The level of transparency and traceability are exactly what I now see as non-negotiable in faith-based AI. It has become my personal benchmark for responsible spiritual technology.

However, when I first tried it, I did wonder; can any AI truly grasp the nuance of spiritual life? I have heard similar feedback from others: sometimes the tone is too mechanical, or the answers feel detached from the lived experience of faith. Users often ask for more empathy and practical connection.

The Vatican, for its part, has put strong guardrails in place:

• All AI-generated Church content must be clearly labelled. In the Church’s case, this is “IA” (intelligensa artificiale).
• A dedicated AI ethics commission oversees both development and compliance.
• All AI use is held to principles of human dignity, peace, and responsible oversight.

Also Read: Operational AI: The silent, yet, strategic revolution shaping modern business

Southeast Asia: A unique landscape of faith and AI

Here in Southeast Asia, I noticed that religious and administrative bodies are taking a proactive, hands-on role in the spiritual uses of AI. Malaysia’s JAKIM and Singapore’s MUIS are prime examples; these organisations curate AI development closely, using locally-relevant texts and ensuring doctrinal fidelity and cultural fit for Shariah-compliant AI.

In multi-racial,-cultural and -religious heterogenous Southeast Asia, these features stand out:

• Increasing digital literacy and rapid adoption blend with deep religious diversity and unique doctrinal standards.
• Religious and government bodies are not spectators; they regulate and guide AI development directly.
• Radical transparency and contextual sensitivity are essential.

Final thoughts: Building trust in the age of AI

AI’s impact on faith, wellness, and mental health has enormous potential, but one must be highly cognisant of the risks. The way forward demands:

• Absolute transparency about how AI tools are built and what data they use.
• Real human oversight to guarantee empathy and ethical alignment.
• Deep cultural and doctrinal sensitivity, especially in pluralistic places like Southeast Asia.

Ultimately, we need to keep asking: not just what AI can do, but how it should do and, above all, who it should truly serve.

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The development of smarter algorithms and higher processing power to drive deeper artificial intelligence (AI) adoption must be accompanied by efforts to capture, analyse, and optimise data more efficiently. Cities that position themselves as testbeds for innovation are experimenting with ways to combine infrastructure, policy, and talent to make this possible.

Dubai is one example. Its pragmatic approach to business has attracted interest from Singapore for years, with Singapore ranking among the top 10 sources of foreign direct investment (FDI) into the city. According to the Dubai FDI Results & Rankings – Highlights Report 2024, 22 per cent of all project announcements from Singapore fall in the software and IT services segment.

This dovetails with the trajectory of Southeast Asia’s tech start-up ecosystem, which reached a combined market valuation of US$454 billion in H1 2024, according to the Destination Southeast Asia Report 2024 published by Founders Forum Group in partnership with EDB Singapore.

The report underscores the growing potential for Southeast Asian enterprises to expand their footprint globally, including into Middle Eastern markets. Dubai’s role as a growing technology hub highlights one pathway for such collaborations, particularly in AI, smart cities, and fintech.

Shared ambition and vision

For mature and late-stage Southeast Asian startups exploring international expansion, Dubai offers a case study in how supportive ecosystems are structured.

The city combines legislation designed to streamline business operations with infrastructure and amenities that support socioeconomic development. Its geographic position at the crossroads of Europe, Asia, and Africa strengthens this appeal by connecting global experts who are focused on improving data curation, accessibility, and application.

Policy instruments such as long-term visas, including Golden and Remote Working Visas, illustrate how talent mobility is being addressed, while strategies such as the Dubai Economic Agenda ‘D33’ and UAE Digital Economy Strategy frame the city’s broader innovation goals. Together, these measures highlight the role of policy frameworks in creating environments conducive to research, development, and international collaboration.

Also Read: B Capital General Partner Yanda Erlich on the red flags he notices when investing in AI space

An evolving ecosystem

Over the past 25 years, Dubai Internet City has become a focal point for this shift. It has served as a base for global firms as well as start-ups and scale-ups, and today hosts more than 4,000 companies and 31,000 professionals, along with innovation and R&D centres. Singaporean companies such as Wego, an online travel marketplace, are among those that have established a presence there.

The district’s initiatives — including mentorship programmes, co-working spaces, incubators like in5 Tech, and flexible platforms such as D/Quarters — offer a glimpse into how ecosystems can be structured to support entrepreneurs. According to publicly available figures, companies within Dubai Internet City’s ecosystem have collectively raised around AED 8 billion in investment to date.

Looking ahead

These developments connect with broader regional conversations. At events such as the debut edition of GITEX Asia in Singapore in April, the emphasis on fostering talent and data-driven innovation resonated with Southeast Asia’s own ambitions. Both Singapore and Dubai are prioritising ecosystems that enable experimentation, scaling, and cross-border collaboration.

Efficient data management will be central to accelerating AI adoption. As Southeast Asian start-ups look to new markets, examining how ecosystems such as Dubai’s are structured provides lessons on what it takes to integrate infrastructure, policy, and global talent into meaningful innovation pathways.

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Artificial Intelligence is reshaping industries across the world. For small and medium enterprises in South Asia, the question is no longer whether AI will matter but how it will transform the way these businesses operate.

SMEs in India and Sri Lanka stand at an important juncture. They face challenges of limited budgets, lean teams, and rising competition. Yet they also hold the potential to become more agile and competitive by adopting AI in ways that are practical, affordable, and aligned with local realities.

Why AI matters for SMEs

SMEs are the backbone of South Asia’s economies. India is home to more than 73 million micro, small and medium enterprises (MSMEs) that contribute nearly a third of its GDP. In Sri Lanka, an estimated 1.3 million MSMEs are active, representing more than 75 per cent of all businesses. They account for around 45 per cent of employment and contribute 52 per cent to GDP. These enterprises are the backbone of the economy, supporting employment, innovation, and regional development.

Despite this importance, SMEs in Sri Lanka and India often operate with structural bottlenecks in finance, operations, and market access. Many, particularly in Sri Lanka, function informally, which limits access to credit and technology. AI presents an opportunity to change this landscape by offering a set of adaptable tools that address these constraints directly.

The most important shift is accessibility. In the past, advanced technologies required heavy investments and were available only to large corporations. Today, cloud platforms, no-code applications, and software-as-a-service make AI affordable even for smaller firms.

The future of AI for SMEs will not rely on building expensive in-house systems. Instead, it will depend on adopting lightweight, cost-effective solutions that solve specific business problems.

Where AI will shape the future of SMEs

• Customer engagement and sales

In the coming years, AI-driven personalisation will be essential. A retailer in Colombo could recommend products based on past purchases, while a travel agency in Chennai could create tailored itineraries through an AI assistant. Vernacular AI will grow in importance, given South Asia’s vast linguistic diversity.

Systems that understand Sinhala, Tamil, Hindi, or Bengali will enable businesses to connect with customers more effectively. Predictive analytics will also help businesses forecast demand, reduce stock imbalances, and capture sales opportunities.

• Financial management and access to credit

Cash flow is one of the toughest challenges for SMEs. AI will help by predicting payment delays, assisting with working capital planning, and automating bookkeeping. Another important use is AI-driven credit scoring.

Many SMEs, particularly those in informal sectors, lack long credit histories. AI can help financial institutions evaluate them more accurately, enabling faster and fairer access to loans. In the future, SME owners will rely on real-time dashboards that replace guesswork with data-driven insights.

Also Read: Ecosystem Roundup: Asia’s climate-health crisis deepens as funding lags | SEA tech VC hits US$1.4B | Qapita raises US$26.5M Series B

• AI for fintech in the region

Fintech is emerging as one of the most powerful enablers of SME growth in South Asia. AI is at the core of this transformation.

AI-driven credit risk models allow lenders to extend financing to small businesses that were previously excluded due to lack of formal credit history. By analysing transaction data, utility payments, and digital footprints, AI expands access to working capital.

AI-powered fraud detection systems are also strengthening trust in digital payments. With the rapid rise of mobile wallets and online transactions in both India and Sri Lanka, SMEs can now adopt digital payment platforms with greater confidence.

Customer-facing AI chatbots in fintech apps are improving financial literacy by explaining loan terms, repayment schedules, and investment options in local languages. This democratises access to financial services and builds trust among first-time users.

For SMEs, the fusion of fintech and AI will reduce dependency on informal lenders, lower transaction risks, and provide the tools to integrate into formal financial ecosystems. Over time, this will boost both resilience and competitiveness.

• Operations and supply chains

Volatility in supply chains has become a constant reality. AI can support SMEs by anticipating disruptions, forecasting material needs, and identifying alternative suppliers. Route optimisation will lower logistics costs, while computer vision will improve quality control in production.

For Sri Lankan apparel exporters or Indian auto-component suppliers, these capabilities will be critical for maintaining competitiveness in international markets.

• Talent and workforce productivity

AI will not eliminate SME jobs but will reshape the way employees work. Routine tasks such as data entry, invoice processing, and report drafting will be automated. This will free employees to focus on relationship management, product design, and strategy. SMEs that invest in up-skilling will be better positioned to attract and retain talent. In the future, even small teams will achieve the efficiency of much larger organisations.

• Sustainability and ESG compliance

Sustainability is moving from optional to mandatory in global trade. AI will help SMEs track energy use, improve waste management, and generate automated sustainability reports. This will simplify compliance for export-oriented SMEs and open new opportunities with global buyers who demand responsible sourcing.

Challenges SMEs must overcome

The opportunities are significant, but the path forward is not without obstacles.

• The first challenge is data readiness. Most SMEs lack clean and structured data, which limits the effectiveness of AI tools. Data collection and standardisation will be the foundation of successful adoption.
• The second challenge is cultural resistance. Many business owners rely on instincts built over decades. Building trust in AI will require patience and small, visible successes.
• The third challenge is infrastructure. In rural areas, poor connectivity and unstable power supply make cloud-based AI tools difficult to use. Offline-first designs will be necessary.
• The fourth challenge is cost. Even as AI becomes more affordable, SMEs will hesitate unless the return on investment is clear. Flexible pricing models such as pay-per-use AI will be crucial.
• The fifth challenge is the skills gap. Many SME employees have little exposure to AI systems. Up-skilling programs delivered through industry associations, government initiatives, and training providers will be vital.

Also Read: AI for SMEs in Southeast Asia: From everyday experiments to emerging frontiers

The role of policy and ecosystem support

For SMEs to benefit fully, supportive policies and ecosystems are essential. India’s National AI Mission emphasises inclusion and SME-focused applications, while Sri Lanka has introduced programs promoting smart manufacturing. Both countries recognise that SMEs must be AI-ready to remain globally competitive.

In Sri Lanka, the SME sector has struggled in the context of recent economic challenges. Surviving amidst a financial crisis has made resilience a priority. Policymakers are now considering future directions that combine access to finance, digitalisation, and AI adoption to strengthen the sector.

Industry associations, chambers of commerce, and accelerators will also be critical. Their role is to demystify AI, offer training, and encourage pilot projects that allow SMEs to adopt AI at a manageable scale.

A practical path for SME leaders

For SME leaders in South Asia, the path forward is best taken step by step.

The first step is to identify a clear business problem. This could be customer service delays, cash flow challenges, or high defect rates in production.

The second step is to test affordable AI tools that address that specific issue. A chatbot, a predictive sales dashboard, or an automated invoicing system can provide immediate value.

The third step is to iterate and scale. If the pilot succeeds, resources can be directed toward expanding AI use. If it does not, lessons can be applied to the next experiment. Flexibility is the greatest advantage that SMEs hold over larger competitors.

Also Read: Balancing growth and security: How AI is transforming business and cyber threats

A vision for 2030

By 2030, AI will be deeply embedded in the daily operations of SMEs across South Asia. Local retailers will use voice assistants in regional languages to serve customers. Exporters will employ AI-powered quality checks to meet international standards. Farmers’ cooperatives will benefit from AI-driven climate forecasts to protect yields.

Professional firms will deliver services faster and more efficiently with AI copilots. Fintech platforms will integrate seamlessly with AI systems to offer SMEs tailored credit, secure payments, and real-time financial insights.

This transformation will not involve SMEs imitating large corporations. It will involve SMEs using AI to compete on their own terms, staying lean, responsive, and resilient.

Conclusion

The future of AI for SMEs in South Asia is not about dramatic overnight change. It is about small, focused applications that address everyday challenges. AI will steadily improve customer interactions, enhance financial access, lower costs, and unlock new avenues for growth.

For SMEs willing to experiment, the next decade presents extraordinary opportunities. The lesson is clear. Do not wait for the perfect solution. Start with one problem, adopt a practical tool, and learn from the experience. In this way, AI will become not just a trend but an everyday partner in the success of South Asia’s SMEs.

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Verta Bioenergy, a Singapore-headquartered climate-tech startup, has closed SGD 1.1 million (US$845,000) in seed funding from investors, including ENGIE Factory, Wright Partners, AlphaGen VC, and Auravia Capital.

Jun Umali from the Manila Angel Investors Network (MAIN) also participated.

The fresh capital will fuel the launch of Verta’s first commercial-scale manufacturing plant.

Also Read: EcoSfera helps turn your household waste into energy in the comfort of your home

Per a press statement, the funding injection arrives just one year after the company’s inception, during which Verta claims it has secured more than US$10 million in Letters of Intent (LOIs) with multinational corporations.

Co-created with ENGIE Factory, Wright Partners, and Ming Labs, Verta Bioenergy was incubated under the Singapore Economic Development Board’s (EDB) Corporate Venture Launchpad (CVL) programme.

The startup focuses on transforming agricultural waste into high-quality biomass pellets that are positioned as a cost-competitive, drop-in replacement for industrial coal usage.

With current operations established in the Philippines and plans for broader expansion across Southeast Asia, Verta Bioenergy is preparing to launch a commercial-scale manufacturing plant with an initial production capacity of 12,000 tonnes per year. The company is also developing a solar-powered dryer to enhance the overall sustainability of its process.

Verta’s leadership is bullish on its immediate financial outlook, expecting to achieve positive cash flow within the next 12 months.

Also Read: Turning trash into treasure: How Blue Planet tackles Southeast Asia’s waste crisis

Jeremy Tan, CEO of Verta Bioenergy, confirmed the strategic direction the funding will enable: “Our mission is clear: to replace coal with a cheaper, cleaner, drop-in alternative.” He added: “With the support of ENGIE Factory and our investors, we’re on track to achieve commercial-scale production and expect to generate positive cash flow within the next 12 months.”

 

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A noticeable step back yesterday after President Donald Trump floated the idea of halting trade in cooking oil with China. This comment stirred up new uncertainties in the already fragile ties between the two economic giants, reminding everyone how quickly trade disputes can escalate and ripple through markets. Investors reacted by pulling back from riskier assets, seeking shelter in safer havens.

At the same time, Federal Reserve Chair Jerome Powell offered some stability with his remarks. He noted that the economic picture looked much the same as it did during the September meeting, and he hinted strongly at another quarter-point cut in interest rates coming up later this month. These words from Powell helped temper some of the anxiety, as markets priced in the likelihood of easier monetary policy to support growth amid these tensions.

US stocks wrapped up Tuesday with mixed results, reflecting the push and pull between trade worries and Fed expectations. The Dow Jones Industrial Average climbed 0.44 per cent, showing resilience in some blue-chip names, while the S&P 500 slipped 0.16 per cent, and the Nasdaq dropped a steeper 0.76 per cent.

Tech-heavy indexes felt the brunt of the caution, as investors worried about how trade frictions might hit supply chains and corporate earnings. Bond markets told a similar story of caution. Treasury yields declined as people flocked to government debt for safety. The 10-year yield dropped three basis points to 4.02 per cent, and the two-year yield fell five basis points to 3.47 per cent. This movement underscores how quickly sentiment can shift toward defence when geopolitical headlines dominate.

The dollar weakened a bit in response, with the US Dollar Index down 0.22 per cent to 99.04. Gold, on the other hand, gained 0.4 per cent to reach 4126.47 dollars per ounce. This uptick in gold prices makes sense given the dual drivers of an anticipated Fed rate cut and the safe-haven appeal amid trade and geopolitical strains.

Oil markets faced their own pressures. Brent crude settled 1.47 per cent lower at 62.39 dollars per barrel, influenced by the International Energy Agency’s warning about a massive supply glut looming in 2026. That kind of forecast weighs heavily on energy prices, as it signals potential oversupply that could keep lids on any rebounds.

Also Read: From Tokyo to crypto: How political shifts and policy bets are reshaping global markets

Asian stocks mostly ended lower on Tuesday, mirroring the global unease, but they perked up in early trading today. Optimism around the possible Fed rate cut boosted moods, leading to gains that suggest some recovery in sentiment. US equity futures pointed to a higher open stateside, which could carry over if the positive vibes hold. From my perspective, this back-and-forth highlights the market’s sensitivity to policy signals right now.

Trump’s offhand remark about the cooking oil trade might seem niche, but it taps into broader fears of escalating tariffs or restrictions that could disrupt global supply chains. Powell’s steady hand provides a counterbalance, and I see the Fed’s path as a stabilising force, potentially cushioning against worse outcomes if trade talks sour further. The mixed stock closes remind us that not all sectors benefit equally from lower rates, especially tech, which relies on smooth international flows.

Looking to the cryptocurrency space, the market endured a 1.66 per cent drop over the last 24 hours, building on a 7.57 per cent slide over the week. This downturn stems from a combination of regulatory pressures and a major scam revelation, which together amplified the risk-off mood. Technical signals indicate oversold territory, suggesting a potential bounce if sentiment shifts; however, caution remains the order of the day.

Regulatory developments hit hard, with US authorities charging Chen Zhi, the chairman of Cambodia’s Prince Holding Group, in connection with laundering 14 billion dollars through crypto scams, as reported by Nikkei Asia. At the same time, Japan outlined plans to prohibit insider trading in crypto by 2026, also per Nikkei Asia. These moves rattled investors, reinforcing the view that digital assets carry significant oversight risks. Institutions grew wary, and retail traders sold off, fearing broader crackdowns.

In my humble perspective, these regulatory steps mark a maturing phase for crypto, where governments aim to curb abuses that have plagued the sector. The 14 billion dollar scam case stands out as a stark example of how fraud can undermine trust, and Japan’s insider trading ban signals a push toward mainstream financial standards.

While this might sting in the short term, it could build longer-term credibility if implemented thoughtfully. Investors should monitor the evolving details of Japan’s legal changes and any potential spillover from the seizure in the scam probe. Such events often lead to temporary sell-offs but can pave the way for more robust frameworks that attract serious capital.

Derivatives markets showed clear signs of stress, adding to the bearish tone. Total open interest in derivatives decreased 1.73 per cent to 989.73 billion dollars, and average funding rates plummeted 36.3 per cent in just 24 hours. Perpetual contracts volume rose 1.69 per cent to 697.74 trillion dollars, indicating frantic trading amid the panic.

This unwind of leverage came after Bitcoin dipped briefly below 105 thousand dollars, sparking 19 billion dollars in liquidations earlier in the week. The spot-to-perpetual ratio of 0.21 underscores how speculation dominated, making the market vulnerable to sharp corrections.

Also Read: Global markets freeze as Trump-Putin summit fails: What’s next?

I think this leverage purge reflects a healthy, if painful, reset. High funding rates often signal overextended positions, and their sharp drop shows traders rushing to exit as prices fall. The surge in perpetual volume points to knee-jerk reactions, where fear drives more activity rather than conviction.

In broader terms, this dynamic exposes crypto’s volatility, amplified by leveraged bets that can turn minor dips into cascades. From an optimistic angle, clearing out excess leverage might set the stage for more sustainable growth, reducing the risk of even larger blowups down the line.

Sentiment metrics captured the prevailing fear. The Crypto Fear and Greed Index slid to 37, squarely in fear territory, down from 42 the day before. This drop illustrates eroding confidence, as participants grapple with the regulatory and market pressures. Technically, the picture looked grim too.

The overall crypto market capitalisation stood at 3.84 trillion dollars, below the 50 per cent Fibonacci retracement level of 3.98 trillion dollars. The seven-day Relative Strength Index hit 28.38, indicating extreme oversold conditions, while the MACD histogram at negative 33.12 billion confirmed ongoing bearish momentum. Bitcoin’s dominance climbed to 58.59 per cent, suggesting a shift toward it as a relatively safe haven within the crypto ecosystem.

From where I stand, these technical breakdowns reveal how algorithms and momentum traders can exacerbate declines. Crossing below key Fibonacci levels often triggers automated selling, and the low RSI screams oversold, which historically precedes rebounds in other markets. But in crypto, with its unique mix of retail enthusiasm and institutional hedging, the MACD’s bearish read might prolong the pain.

The rise in Bitcoin dominance tells me investors are hunkering down in the biggest name, viewing it as less risky than altcoins during turmoil. Overall, this setup feels like a capitulation phase, where fear dominates but could flip if positive catalysts emerge, like clearer Fed actions or easing trade tensions.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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A report by AVPN and Prudence Foundation, in partnership with Catalyst Management Services (CMS), finds that as climate shocks intensify across Asia, traditional risk management and health surveillance systems are proving inadequate. Investors are now focusing on the convergence of digital innovation, climate data, and finance to create scalable safety nets.

This confluence manifests in two high-potential areas: AI-driven early warning systems and climate-linked parametric insurance models.

Also Read: Asia’s climate-health crisis deepens amid massive funding gaps

According to the ‘Unlocking Capital For Climate x Health: The Investment Landscape in Asia’ report, investors view climate-linked insurance as a “catalytic frontier”. Parametric models, which trigger automatic payouts based on pre-defined index thresholds (like rainfall, temperature, or disease incidence), eliminate lengthy claims processes, providing rapid financial relief to households and local authorities.

Applications of parametric models

These models have several practical applications that attract blended capital:

• Heat-index insurance: Providing rapid payouts for informal workers affected by extreme heat days.
• Vector-linked payouts: Offering immediate funds to public health providers when disease vectors (like mosquitoes) cross defined population thresholds.
• Bundled crop-health-risk covers: Protecting smallholder farmers against agricultural losses and subsequent health impacts following extreme weather.

Case study: WRMS SecuRisk platform

India’s Weather Risk Management Services (WRMS) and its SecuRisk platform provide a blueprint for this model.

• The technology: SecuRisk links climate data, collected via satellite and IoT, with parametric insurance to trigger automatic payouts instantly when climate thresholds (e.g., specific rainfall amounts or heat indices) are crossed.
• Impact and scale: This model reduces disaster-driven health losses and strengthens household resilience. It has successfully integrated with digital payment systems and Aadhaar, demonstrating scalability. WRMS has secured a significant grant of approximately US$2.268 million (€2.1 million) from the InsuResilience Solutions Fund and aims to expand its reach from 1,300 households to over 85,000 users.
• Investment potential: The global parametric insurance market is projected to surpass US$29 billion by 2031, signalling strong long-term commercial interest.

The role of AI surveillance

In parallel, AI surveillance and remote sensing tools are vital for adaptation, enabling governments to pilot early-warning systems for altered disease patterns. However, investors classify AI surveillance as a high-risk category (MVS 3.9-4.0) due to long development cycles, reliance on public data, and algorithmic bias and data privacy hurdles. Monetisation often depends on software as a service (SaaS) models licensed to health authorities, making government integration and policy buy-in essential for adoption. The success of these deeptech solutions hinges on integrating interdisciplinary capacity: technology, epidemiology, and policy expertise.

Also Read: Asia’s climate x health startups struggle in the ‘missing middle’ funding void

Ultimately, these investments turn climate risk into a measurable, insurable, and manageable metric, moving finance from reactive crisis response to proactive resilience building.

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For much of the past decade, venture capital in Southeast Asia was synonymous with hypergrowth: writing large cheques, chasing valuations, and celebrating fundraising milestones as the ultimate marker of success. In those years, capital alone often seemed like the fuel that could propel startups into market leadership.

But the environment has shifted. Fundraising is slower, scrutiny from LPs is sharper, and macroeconomic headwinds mean investors can no longer assume that money by itself will deliver scale. The conversation has moved from “how much was raised” to “how resilient is the business model.” Nowhere is this more evident than in B2B technology, where long sales cycles, enterprise compliance demands, and complex go-to-market strategies mean that maturity and operational discipline are prerequisites—not afterthoughts.

Where equity alone falls short

B2B startups don’t scale like consumer platforms. Long sales cycles, compliance hurdles, and enterprise buyer scepticism mean cash alone cannot guarantee traction. Founders in the region often bring vision and technical brilliance, but lack depth in:

• Financial governance to produce board-ready forecasts and disciplined cash controls.
• Enterprise sales execution to build structured pipelines and customer success models.
• Operational maturity to manage scale, risk, and compliance across multiple geographies.

When these disciplines are missing, portfolios suffer a “barbell effect”: a handful of companies thrive, while the rest stagnate.

Also Read: Navigating VC funding: The crucial role of a well-managed cap table

Why operational value creation matters

Across the industry, operating leverage is now the main driver of returns. Nearly half (47 per cent) of PE/VC value creation today comes from operational improvements, up from just 18 per cent in the 1980s. Firms that embed governance and discipline early are rewarded with stronger exits and faster follow-on rounds.

Examples from the region show this clearly:

• A Singapore cybersecurity startup closed a strong Series A after introducing structured board reporting and financial forecasting.
• A Malaysia-based SaaS company improved retention by adopting customer success practices.
• An Indonesian deep-tech firm unlocked strategic investment by professionalising operations with COO-level processes.

The common thread: once governance and scalability were evident, investors doubled down.

How VCs can differentiate

The most forward-leaning B2B VCs in Southeast Asia are already moving beyond capital by:

• Embedding operating partners and fractional C-suite talent to instil governance and GTM rigour.
• Providing structured frameworks that standardise reporting across portfolios, improving board communication.
• Incentivising operating support through performance-linked models that align outcomes with fund returns.

This is not simply nice-to-have. In markets where capital efficiency is scrutinised and enterprise buyers are risk-averse, these interventions are the difference between a portfolio company raising its Series B (or running out of runway).

Beyond capital lies capability

The days when capital alone could mask gaps in governance, sales discipline, or operational maturity are fading quickly. The pressure to demonstrate capital efficiency, credible growth, and resilience is now front and centre. For investors, the real differentiator lies in helping portfolio companies build the structures that endure beyond the next funding round.

In Southeast Asia’s B2B venture landscape, this evolution is already underway. The companies that will stand the test of time are not those that raise the largest rounds or capture headlines for sky-high valuations, but those that combine vision with capability. Beyond capital lies the true currency of value creation: the ability to build organisations that can grow, adapt, and thrive long after the initial cheque is written.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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