For much of the past decade, Southeast Asia’s venture capital story was sold as a regional one. Singapore provided the capital base, legal infrastructure and headquarters location; Indonesia, Vietnam, the Philippines, Malaysia and Thailand supplied the young consumers, rising digital adoption and growth markets.
That framing now looks increasingly out of date.
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The “Southeast Asia Startup Funding Report” for 2025 by DealStreetAsia and Kickstart Ventures points to a sharper split in the region’s venture market. Capital has not simply become more cautious after the exuberance of 2021 and 2022. It has become more concentrated. Investors are no longer spreading money evenly across Southeast Asia’s major startup ecosystems.
Instead, they are clustering around Singapore, the market they consider safest when exits are scarce, valuations are under pressure and governance risks sit higher on the investment checklist.
The result is a Singapore-centric funding map: one highly capitalised hub surrounded by neighbouring markets facing weaker early-stage activity, fewer late-stage rounds and a slower path to recovery.
Singapore pulls away
The numbers show how pronounced the divide has become.
In 2025, Singapore accounted for 61.4 per cent of Southeast Asia’s equity deal volume, with 283 transactions. More strikingly, it captured 78.1 per cent of total equity funding value, or US$4.20 billion. Vietnam followed with US$360 million, Indonesia with US$340 million and Malaysia with US$260 million. The rest of the region together accounted for only US$350 million.
The concentration intensified in the second half of the year. Singapore’s equity funding value rose to US$2.99 billion in H2 2025, up more than 147 per cent from US$1.21 billion in the first half. Deal count also increased from 129 to 154.
That was not a broad-based rebound across startup stages. Much of the late-stage money went into Singapore-based or Singapore-headquartered companies with stronger institutional backing and clearer regional or global ambitions. Late-stage deal value in Singapore hit US$2.01 billion across 16 deals in H2, compared with US$400 million across seven deals in H1.
Two transactions illustrate the pattern. Payments company Thunes raised a US$150 million Series D round, while Princeton Digital Group secured US$1.30 billion. Of Southeast Asia’s four new tech unicorns in 2025, two — healthtech firm Ultragreen.ai and fintech platform Thunes — were headquartered in Singapore.
Singapore’s advantage is not only about being richer. It has deeper capital markets, a more predictable regulatory environment, stronger legal structures and a greater concentration of regional headquarters. In a bull market, investors may be willing to absorb more uncertainty in exchange for growth. In a correction, those institutional comforts matter more.
Neighbours struggle for momentum
The contrast with other Southeast Asian markets is stark.
Indonesia, the region’s largest consumer market, remained active but subdued. It accounted for 14.3 per cent of deal volume, with 66 transactions, but only 6.3 per cent of total regional funding value, or US$340 million. In H2 2025, investors deployed US$260 million across 32 deals. Late-stage capital returned selectively, with six deals worth US$160 million after none in the first half, but the market appears to have stabilised at a lower level rather than regained real momentum.
Vietnam saw an even harder reset. Its startup ecosystem recorded only US$90 million across 13 equity deals in H2, down from US$280 million across 23 deals in H1. Early-stage dealmaking fell to just 12 transactions in the second half, compared with 21 in the previous semester. For a market once viewed as one of Southeast Asia’s most promising next-generation tech hubs, the slowdown is significant.
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Malaysia also continued to lose pace. Equity funding slipped to US$61 million across 16 deals in H2. Early-stage volumes declined to 16 deals, down from 23 in H1 2025 and 34 in H2 2024. The US$155 million growth equity round by Ashita Group stood out, but it did not change the broader picture of thinning startup activity.
The Philippines remained constrained by the absence of later-stage capital. Funding fell for two consecutive semesters, reaching US$33 million across nine deals in H2. Late-stage funding was absent for the past two semesters. The country’s digital economy has produced large platforms, but many are closely linked to corporate groups rather than independent venture-backed companies. That limits the pipeline of startups that can raise large growth rounds, pursue IPOs or deliver venture-scale exits.
Thailand was the exception, though from a low base. Funding rose to US$66 million across seven deals in H2, compared with US$10 million in H1. Fintech accounted for nearly 90 per cent of the country’s startup funding, suggesting that the improvement was narrow rather than ecosystem-wide.
Why investors are crowding into safety
The deeper issue is not only that funding has slowed. It is that the risk calculation has changed.
Edgar Hardless, CEO of Singtel Innov8, pointed to a problem that has shadowed Southeast Asian venture capital for years: exits. “One of the biggest challenges is the lack of exits, creating higher uncertainty of returns for investors in this region,” he said.
That matters because venture capital relies on liquidity. Startups can raise multiple rounds, but investors ultimately need companies to list, be acquired or provide secondary-sale opportunities.
In Southeast Asia, those exit routes remain limited. Valuations set during the 2021 and 2022 boom have also made acquisitions harder, as potential buyers are often unwilling to match old expectations.
This dynamic hits younger ecosystems hardest. Minette Navarrete, President and Managing Partner of Kickstart Ventures, noted that the Philippines still has room to mature. “The ecosystem is still relatively young and has room to grow; the Philippines has yet to produce an independent unicorn, and firms often struggle to raise funding beyond Series B,” she said.
The governance question has also become more central. After a series of corporate governance failures and fraud cases in the region, investors are applying tougher filters to both startups and funds. Navarrete described governance as “a new competitive advantage for startups and venture capital firms”.
That shift favours companies with cleaner reporting, stronger controls and more transparent operations. It also favours Singapore, where regulatory trust and institutional infrastructure are part of the market’s selling point.
A fractured regional future
The danger is that Southeast Asia’s venture ecosystem becomes less regional in practice, even as founders continue to talk about regional expansion.
If more than three-quarters of equity funding value is concentrated in one market, promising companies in Indonesia, Vietnam, the Philippines and Malaysia may struggle to raise the capital needed to move beyond seed and Series A. That could create an innovation drought outside Singapore, where startups exist but fewer have the runway to become regional challengers.
The answer is not for neighbouring markets to imitate Singapore wholesale. Their strengths are different: Indonesia has scale, Vietnam has technical talent, the Philippines has digitally engaged consumers, Malaysia has cross-border operating depth, and Thailand has sector-specific opportunities. But these markets need stronger exit pathways, better governance standards, more local institutional capital and clearer rules for scaling businesses.
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Founders, too, face a changed environment. The old “grow fast at all costs” model is no longer enough. Investors now want disciplined unit economics, credible paths to profitability and evidence that companies can survive without endless external funding.
Southeast Asia is still a compelling startup region. But in 2025, its funding landscape stopped looking like a single rising tide. It became a map of divergence, with Singapore as the safe harbour, and the rest of the region fighting to bring capital back to shore.
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