Southeast Asia’s venture capital market is no longer in freefall. But calling it a recovery would miss the more important story.
The region’s startup funding landscape in 2025 has split into two very different markets, according to the “Southeast Asia Startup Funding Report for 2025” by DealStreetAsia and Kickstart Ventures. At the top end, mature companies with revenue, governance and clearer paths to liquidity are once again attracting large cheques. At the bottom, seed and pre-seed founders are still battling lower valuations, slower decisions and investors who want proof far earlier than they did during the boom years.
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“What we’re seeing at this point is stabilisation rather than a rebound,” said Minette Navarrete, President and Managing Partner of Kickstart Ventures. That distinction matters. Capital is moving again, but with far less tolerance for speculative growth.
The result is a more disciplined Southeast Asian venture market, one that is rewarding companies seen as de-risked, while forcing younger startups to survive longer on leaner terms.
Late-stage capital finds its way back
The clearest sign of reopening came in late-stage funding. Deal volume more than doubled to 24 late-stage transactions in the second half of 2025, compared with 10 in the first half and nine in the second half of 2024. Late-stage equity proceeds rose to US$2.23 billion in the second half, up from US$760 million in the first half.
On paper, that looks like a strong comeback. In practice, the rebound was heavily shaped by a small number of very large deals. The most obvious example was Princeton Digital Group’s US$1.3 billion growth equity transaction in Singapore, which accounted for a large share of late-stage capital raised.
Strip out such mega-rounds, and the picture becomes more measured. Capital was spread across more transactions, but cheque sizes remained cautious. Investors were not returning to the 2021-era habit of backing ambitious narratives at almost any price. They were concentrating capital in companies with scale, market position and a credible route to public markets or strategic exits.
Even so, the reopening was significant enough to create four new unicorns in Southeast Asia in 2025, compared with one in 2024 and two in 2023.
Singapore-based healthtech platform Ultragreen.ai reached unicorn status after a US$188 million pre-IPO growth equity round that valued it at US$1.3 billion. Its subsequent listing suggested that public market investors remain willing to back healthtech companies if they can show clinical validation and revenue depth.
Malaysia’s Ashita Group joined the club after raising US$155 million in growth capital, signalling that scaled e-commerce and B2B2C models can still attract premium pricing when they demonstrate defensibility. Singapore payments company Thunes raised a US$150 million Series D, taking its post-money valuation to US$1.42 billion, while digital asset banking group Sygnum also crossed the threshold after an oversubscribed US$58 million strategic growth round.
These companies sit in very different sectors, but they share a common theme: they are not being funded purely on market potential. Investors are looking for proof that the business model can withstand scrutiny.
The lead investor problem
For late-stage founders, the market has improved, but it has not become easy. The biggest challenge is often finding the first investor willing to set the terms.
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Mathias Imbach, co-founder and Group CEO of Sygnum, said the central difficulty in closing its growth round was “finding the lead”. Once a credible lead investor is in place, the rest of the syndicate can follow. Without one, even strong companies can remain stuck in prolonged negotiations.
That reflects a broader shift in Southeast Asia. Growth investors are spending more time on due diligence, valuation benchmarks and downside protection. They are still willing to write large cheques, but only when they believe the company can justify the price through revenues, margins, governance and eventual exit potential.
For founders, this means late-stage fundraising has become less about creating competitive heat and more about building conviction among a smaller pool of selective investors.
Early-stage founders face a harder market
The other half of the story is far less comfortable. Early-stage activity, from pre-seed to Series B, continued to slow. Deal volume fell to 209 transactions in the second half of 2025, from 218 in the first half and 259 in the second half of 2024.
Proceeds did rise to US$1.28 billion in the second half from US$1.10 billion in the first half, but this was not a broad-based easing. The increase came from a narrower group of stronger companies rather than a general revival in risk appetite.
The valuation pressure is most visible at the entry points. Median seed valuations fell to US$2 million in 2025 from US$2.5 million in 2024. Pre-seed valuations rebounded to a median of US$500,000 from US$100,000, but the report described this category as volatile.
For first-time founders, the message is clear: investors are no longer paying up for ambition alone. They want early signs of product-market fit, customer willingness to pay and a credible path towards profitability. In Southeast Asia, where markets are fragmented by language, regulation, infrastructure and consumer behaviour, that bar can be especially difficult to clear.
There are still pockets of resilience. Series A valuations held steady at a median of US$10 million, remaining above pre-pandemic levels. That suggests companies which have found initial traction can still raise on stable terms. Series B was stronger still, with median valuations rising to US$17.8 million from US$10.0 million in 2024.
This underlines the bifurcation: investors are not abandoning early-stage startups altogether. They are drawing a sharper line between experiments and businesses that have already reduced execution risk.
Logan Tan, co-founder and CEO of e-procurement marketplace Eezee, said Southeast Asian founders can no longer copy Silicon Valley’s “grow fast at all costs” playbook. “The collapse of several highly funded unicorns here is proof that raising large sums to chase hypergrowth without solid fundamentals is unsustainable,” he said.
His prescription is pragmatic: customer-led growth, margin discipline and a cash runway of one to two years. That may sound conservative, but in today’s market it is increasingly what survival looks like.
The exit problem remains
The biggest unresolved issue is liquidity. Southeast Asia has produced large technology companies, but it still lacks a deep and reliable exit market. Public listings remain selective, while strategic acquisitions are often slowed by valuation gaps between founders, investors and potential buyers.
Edgar Hardless, CEO of Singtel Innov8, pointed to the pressure created by high entry valuations from the last cycle. “The appetite of companies in this region to meet the valuation expectations from entrepreneurs and investors is more limited compared to other regions like North America,” he said.
That leaves venture funds looking for other routes to return capital. Secondary transactions, where existing shareholders sell stakes to new investors, are becoming more important. They do not solve the exit bottleneck entirely, but they can provide partial liquidity in a market where IPOs and large M&A deals remain uneven.
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The broader lesson from 2025 is that Southeast Asia’s startup ecosystem is maturing, but not uniformly. Late-stage companies with scale are regaining access to capital. Early-stage founders are being forced to build with less. Investors are still active, but they are more selective, more patient and more demanding.
For the region, that may not be a bad thing. The funding boom created speed, but also excess. The current cycle is quieter, tougher and less forgiving. It may also produce companies built to last.
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