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That framing now looks increasingly out of date.

Also Read: “Not a bank, not a gamble”: Chocolate Finance wants your business’s spare cash

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.

Also Read: Southeast Asia startup funding finds a floor, but not a rebound

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.

Also Read: Growing SEA startups with Kickstart Ventures

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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The Jakarta High Court has increased the prison sentence of Ibrahim Arief, a former technology consultant linked to ex-education minister Nadiem Makarim and former VP (Engineering) at OVO, in a corruption case tied to the procurement of Chromebooks for Indonesian schools, according to Kompas.com.

A panel of judges sentenced Arief to five years in prison, one year longer than the four-year sentence handed down earlier by the Jakarta Corruption Court. The appeal ruling, read by Judge Catur Irianto on Monday, also ordered Arief to pay a fine of around US$30,800 and compensation of about US$308,000.

Also Read: Nadiem Makarim sentenced to 10 years in Chromebook corruption case

The case has drawn attention in Indonesia not only because it involves public-sector technology procurement, but also because of its proximity to one of Southeast Asia’s most recognisable technology figures. Makarim, who co-founded ride-hailing and super-app giant Gojek before assuming the role of the Education Minister, became a symbol of Indonesia’s digital economy ambitions. The Chromebook case, however, has put a different spotlight on the intersection of technology, education policy and state spending.

A heavier ruling on appeal

According to Kompas.com, the Jakarta High Court panel accepted appeals filed by both the public prosecutor and Arief’s defence team. The judges then amended the earlier decision of the Jakarta Corruption Court, particularly on the main prison sentence and the additional punishment related to replacement money.

“Declaring that the defendant Ibrahim Arief alias Ibam has been legally and convincingly proven guilty of committing a criminal act of corruption committed jointly as in the indictment of the public prosecutor’s subsidiary,” the verdict stated, as quoted by Kompas.com.

The judges imposed a five-year prison sentence and a fine of around US$30,800. The fine must be paid within one month, with a possible extension of up to one more month, after the decision obtains permanent legal force.

More significantly, the court ordered Arief to pay compensation of around US$308,000. If he fails to pay within one month after the ruling becomes final and binding, prosecutors may seize and auction his assets to recover the amount. If his assets are insufficient, he faces an additional four years in prison.

The court also said that if Arief pays only part of the compensation, the amount paid will be taken into account when calculating the additional prison term. His time under city detention will be deducted from the sentence, and the court ordered that he remain under city custody.

The lower court split

The appeal ruling builds on an earlier verdict from the Jakarta Corruption Court, which had sentenced Arief to four years in prison and imposed the same fine of around US$30,800. At that stage, he was found guilty of violating provisions under Indonesia’s Corruption Law, in conjunction with Article 55 paragraph 1 of the old Criminal Code, which concerns participation in criminal acts.

Also Read: Nadiem Makarim indicted in US$125M Chromebook graft case

But the lower court decision was not unanimous. Two judges, Eryusman and Andi Saputra, issued dissenting opinions. They argued there was no evidence of malicious intent, no direct role in lobbying, and no proof that Arief had received illicit gains.

According to the dissenting judges, Arief acted only as an information technology consultant and did not have decision-making authority within the Ministry of Education and Culture. They also found no strong causal link between his actions and the criminal acts charged.

Kompas.com reported that, in the court’s deliberations, Arief was said to have pointed out weaknesses in Chromebooks and recommended the use of Windows-based devices for schools. That detail is important because it complicates the usual picture of a procurement case: rather than being portrayed as a simple advocate for the purchased product, Arief was described by the dissenting judges as someone who had raised concerns about it.

The High Court, however, took a different view and concluded that the evidence supported a conviction and a heavier sentence.

Why the case matters beyond Indonesia

For Southeast Asia’s technology ecosystem, the case is a reminder that digitisation is not just about startups, software and adoption curves. It is also about public trust, procurement design and accountability.

Across the region, governments have poured money into digital education, cloud systems, national identity platforms, healthtech infrastructure and AI readiness programmes. These projects often require collaboration between ministries, consultants, vendors and technology providers. When governance is weak or roles are blurred, the risks multiply.

Indonesia, Southeast Asia’s largest digital economy, has been especially ambitious in using technology to modernise public services. The education sector is a major part of that agenda, given the country’s vast geography and uneven access to quality learning tools. Devices such as Chromebooks are attractive to governments because they can be relatively affordable, cloud-based and easier to manage at scale. But hardware procurement for schools is also vulnerable to controversy: specifications, operating systems, vendor choices, distribution and after-sales support can all become points of dispute.

That makes the Arief case relevant beyond the courtroom. It raises questions about how governments evaluate technology recommendations, how consultants’ roles are defined, and how responsibility is assigned when procurement decisions later face corruption allegations.

For founders and investors in Southeast Asia, particularly those selling to governments, the message is clear. Govtech and edutech contracts can offer scale, but they also require stricter compliance, cleaner documentation and a sharper understanding of public-sector accountability. A consultant’s advice, a vendor’s pitch or a ministry’s technical decision may later be scrutinised not as part of a commercial negotiation, but as evidence in a criminal case.

The shadow of Makarim’s legacy

The mention of Makarim gives the case wider resonance. Before entering politics, he helped build Gojek into one of Southeast Asia’s defining startups, proving that a local platform could compete at massive scale and reshape daily life in Indonesia. His appointment as education minister was seen by many as a sign that startup thinking could be brought into government.

But public administration operates under different rules from startup execution. Speed, experimentation and vendor partnerships may be praised in the private sector, but government projects must also satisfy procurement law, audit trails and public scrutiny.

Also Read: The VCs writing off Indonesia are making a US$300B mistake

The case involving Arief does not erase the broader digital reforms attempted in Indonesian education, but it does show how politically and legally sensitive such reforms can become. Technology choices in schools are not neutral. They affect budgets, vendors, teachers, students and the credibility of government institutions.

For now, the legal focus is on Arief’s conviction and the High Court’s decision to increase his sentence. Whether further legal steps follow will determine how final this chapter is. But the broader lesson is already visible: in Southeast Asia’s push to digitise the state, governance may prove just as important as the technology itself.

The post Jakarta court raises sentence for ex-consultant of Nadiem Makarim in Chromebook graft case appeared first on e27.

Southeast Asia’s venture capital map fractured further in 2025. Singapore alone accounted for 78.1% of the region’s equity funding value (US$4.2 billion) and 61.4% of deal volume, according to a new DealStreetAsia-Kickstart Ventures report.

The city-state’s share intensified in the second half of the year, with funding value jumping 147% and late-stage rounds such as Thunes’ US$150 million Series D and Princeton Digital Group’s US$1.30 billion raise reinforcing its pull. Vietnam, Indonesia and Malaysia trailed far behind with US$360 million, US$340 million and US$260 million respectively, while the rest of the region shared just US$350 million.

Vietnam suffered the sharpest reset, its H2 funding nearly halving to US$90 million. The Philippines remained starved of late-stage capital, and Malaysia’s early-stage activity kept shrinking. Only Thailand improved, though almost entirely on the back of fintech.

Singtel Innov8‘s Edgar Hardless points to the region’s chronic lack of exits as the core problem, while Kickstart Ventures’ Minette Navarrete argues governance has become “a new competitive advantage.” The result: a Singapore-centric funding map, and a harder climb for founders everywhere else in the region.

Read the full report here.

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REGIONAL

SEA venture funding stabilises but shows no real rebound: Southeast Asia closed 2025 with only 461 equity deals, the lowest annual count since 2018, a sign the region’s venture market has stopped falling but not yet rebounded.

Jakarta court lengthens sentence in Chromebook graft case: A Jakarta appeals court increased Ibrahim Arief’s prison term to five years over a corruption case tied to Chromebook procurement for Indonesian schools, linked to ex-minister Nadiem Makarim’s tenure.

Lumio Solar bags US$900K for plug-and-play solar in PH: The Philippine startup wants to make rooftop solar accessible to renters and households without property ownership, betting plug-and-play appliances can widen adoption beyond wealthier homeowners.

MAS commits US$173M to next phase of fintech innovation: Singapore’s central bank will channel US$173 million into fintech development, sustaining the city-state’s push to cement its position as the region’s leading financial and innovation hub.

Vietnam to embed AI lessons across all school grades next year: From the next academic year, AI education will be integrated into Vietnam’s national curriculum, reflecting a state-led effort to build foundational digital literacy at scale.

AI boom to keep Singapore manufacturing resilient, say economists: Surging data centre and semiconductor demand tied to the AI buildout is expected to buffer Singapore’s manufacturing sector against broader global trade headwinds, economists say.

Gojek Singapore expands Zig tie-up with GoTaxi launch: The ride-hailing partnership between Gojek and Zig deepens in Singapore, with the GoTaxi service marking a broader push to consolidate mobility options for commuters on the island.

GoTo VP Catherine Hindra resigns citing personal reasons: Catherine Hindra’s departure adds to a string of senior exits at the Indonesian tech giant as it continues restructuring amid pressure to reach sustained profitability.

FEATURES AND INTERVIEWS

Chocolate Finance eyes SMEs’ idle cash after consumer scale: Having built US$1.3 billion in assets from over 150,000 Singapore consumers, the fintech now targets small businesses’ spare cash, betting the same simple-yield pitch translates to SMEs.

INTERNATIONAL

South Korea’s President Lee says interest rate rise is unavoidable: President Lee’s remarks signal tightening monetary conditions in a key regional tech economy, with potential knock-oneffects for startup valuations and venture activity across North East Asia.

ChatGPT, Reddit, and Roblox face EU Digital Services Act rules: The EU’s DSA brings strictercontent moderation and transparency obligations to major platforms, a regulatory template SEApolicy makers are increasingly watching and replicating.

Meta executive leaves for OpenAI amid India scrutiny: A senior Meta executive’s move to OpenAI coincides with growing regulatory pressure on the social media giant in India, one of its largest and most contested markets globally.

Chinese automakers follow Tesla’s bet on humanoid robots: Chinese EV makers are integratinghumanoid robotics into their manufacturing and product road maps, intensifying competition in asector that SEA industrial players are beginning to monitor closely.

US erects barriers around drones and robots as China holds scale: Washington’s exportcontrols and procurement restrictions on drone and robotics technology are reshaping supply chains, forcing SEA buyers to pick sides in an increasingly bifurcated market.

Apple App Store chief Phil Schiller exits as Tim Cook steps down: Phil Schiller’s departure is part of a broader leadership exodus at Apple, raising questions about the company’s developer and app ecosystem strategy at a pivotal moment for mobile platforms globally.

Tim Cook’s farewell: Apple’s future lies with a product builder: In his parting message, Cook signals confidence in his successor’s product-first philosophy, a transition that will reverberate across the global app and device ecosystem that SEA developers depend on.

Crypto shrugs off Fed rate fears as stocks wobble: Digital asset market cap climbed 1.09% to US$2.64 trillion even as equities stumbled under bond-yield pressure, exposing a widening divergence between risk appetites in crypto and traditional markets.

Bitcoin sellers dig in at US$81,000 ahead of Asia open: Total crypto market value fell 0.89% to US$2.61 trillion in 24 hours, with traders citing shifting rate-hike expectations as the driver behind the pullback.

CYBERSECURITY

Ransomware hits schools via stolen logins, not malware: A new Sophos report finds identity-based attacks drove 85% of ransomware incidents against education institutions, above the 79% cross-sector average, as stolen credentials and phishing replace exotic malware.

CrowdStrike and Telkom Indonesia sign MOU on AI-driven cybersecurity: The partnership positions Indonesia’s state-owned telco to deploy AI-powered threat detection across itsinfrastructure, signalling growing enterprise-level cyber security investment in South East Asia’slargest economy.

SEMICONDUCTOR

SEA’s chip-hub ambitions collide with smuggling scrutiny: Singapore police recently froze a US$42 million bungalow tied to a fraud probe linked to Nvidia chip reseller Aperia Group, underscoring the region’s growing role as a transhipment point for restricted chips.

Nvidia’s US$3.5B MediaTek bet maps its AI chip strategy: Nvidia’s investment in MediaTek signals a push to broaden its AI silicon foot print beyond data centres into edge devices, with implications for chip supply chains across Asia.

Nvidia’s AI advantage is moving beyond the GPU: Nvidia is extending its moat into networking, software, and systems, a strategic shift that could reshape how AI infrastructure is procured and deployed across the region’s hyper scalers and cloud providers.

Chinese hyperscalers ramp AI spending but trail US rivals: Moody’s finds that Chinese cloud giants are accelerating AI infrastructure investment but remain significantly behind US counterparts in scale gap with direct consequences for SEA’s AI supply chain choices.

AI

100-plus companies call for unified action against rogue AI: OpenAI, Anthropic, Google, and over 100 other firms have jointly urged governments to act against unaligned AI systems, in one of the broadest industry-led AI safety coalitions to date.

India’s hiring slowdown shows AI’s early jobs impact: A survey of 651 Indian tech firms found 65% say AI has already reduced hiring, a pattern also emerging in Britain’s job market data, a warning sign for other economies.

OpenAI backs Thailand’s new eight-week AI accelerator: OpenAI and Thailand’s science ministry are running an eight-week Bangkok accelerator for ten local startups, pushing the country’s AI ambitions beyond demos into hospitals and classrooms.

Japan’s US$27.9B AI market hides tough entry barriers: Japan’s AI sector is projected to triple to US$27.9 billion by 2029, driven by an ageing population and government investment, but foreign entrants face steep structural and cultural hurdles.

THOUGHT LEADERSHIP

Southeast Asia’s AI edge isn’t one advantage, it’s eleven: Rather than chasing frontier labs, the author argues the region’s opportunity lies in combining imported models with local strengths across eleven distinct advantages, not one grand strategy.

Stop treating Southeast Asia as a single market, argues op-ed: Running teams across Singapore, Tokyo and New York, the author warns that treating SEA’s 680 million people as one addressable market is where expansion budgets quietly go to die.

Why the global AI marketing backlash skips Southeast Asia: While Western trend decks warn that 78% say AI ads feel less authentic, the author argues that framing doesn’t map cleanly onto Southeast Asian consumer attitudes toward AI-generated marketing.

A founder’s guide to pitching Southeast Asia’s investors: Raising capital in the region takes more than a good deck, the guide argues, offering founders a practical playbook for navigating one of the world’s most closely watched startup ecosystems.

AI speeds up global expansion but can’t fake local nuance: AI can translate, summarise competitors and prepare market analysis overnight, but the author warns that tasks once needing local specialists still require human judgement to get markets right.

Factory announcements aren’t SEA’s real manufacturing story: Beyond the plant openings, the author argues Southeast Asia’s real competitiveness will be decided by the supply-chain ecosystem — suppliers, logistics, skills — that surrounds new factories.

Southeast Asia builds specialised manufacturing hub network: Vietnam, Malaysia and Thailand are attracting investment across electronics, semiconductors and automotive supply chains, each carving a distinct role while Singapore anchors higher-value technology work.

Southeast Asia quietly gains from shifting FDI redistribution: Beyond incentives, the author recalls how a Miami-based company’s expansion decision hinged on culture, not spreadsheets, as manufacturers quietly redirect investment across the region.

Indonesia’s insurers enter a second digital transformation wave: A former enterprise-software executive turned insurance insider shares what surprised him most after moving into Indonesia’s insurance sector amid its ongoing digital shift.

AI’s environmental impact needs product-level decisions: By the time sustainability teams weigh in, the author argues the important environmental decisions have already been made, pushing companies to treat AI’s footprint as a product design choice.

How to build teams that resist burnout, not just endure it: With Microsoft data showing 48% of workers feel overwhelmed by their workload, the author draws on 15 years leading APAC and EMEA teams to outline what actually prevents burnout.

When your cloud provider’s data centre gets hit by a drone: After a military drone strike knocked out an AWS data centre serving millions of users, the author recounts a week spent manually migrating a platform because automated tools failed too.

SWOT isn’t boring; it’s just used too late, argues writer: Frameworks like SWOT, 5W1H and PESTLE aren’t office wallpaper, the author argues — used at the right time, they help avoid costly strategic mistakes many teams only diagnose in hindsight.

China’s overseas asset tax reform is a signal for SEA: Beijing’s push to tax citizens’ offshore assets is a fiscal move with wider consequences, the author argues, as it reshapes how private wealth moves through the region, not just government revenue.

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The global economic landscape faces numerous structural challenges. Apart from specialized sectors like education, finance, and government, most mainstream industries are experiencing significant headwinds. In corporate boardrooms across the region, “cost cutting” has transitioned from a seasonal strategy to a daily operating baseline.

As a result, once deep-pocketed businesses are striving to find cheaper alternatives across various nodes of their operations. Enterprise Resource Planning (ERP) software often comes under the radar during these efficiency drives. Because ERP systems represent one of the largest IT capital expenditures for an enterprise, the temptation to slash this line item is understandable. However, reducing a strategic digital transformation to a mere budget-slashing exercise carries profound operational risks.

The Singapore ERP Market Landscape

The Singapore ERP ecosystem has traditionally followed a distinct structure. The market for mega-cap corporations is primarily led by established international giants such as SAP and Oracle, known for robust architecture and compliance frameworks. Meanwhile, tier-2 brands—including Microsoft Dynamics 365, NetSuite, and specialized regional players like Multiable—serve as the frontrunners in the mid-tier enterprise market. For entry-level market, brands like Odoo and Chillaccount excels.

Interestingly, while Chinese enterprise software vendors have worked aggressively for nearly two decades to establish a foothold in Singapore, they have largely remained in a status of also-run. Despite their massive scale domestically, replicating that dominance in Southeast Asia’s leading business hub has proven highly elusive.

Famous for extreme domestic competition (“involution”) and aggressive low-cost structures, Chinese ERP vendors initially enjoyed a brief honeymoon period during this recent round of regional cost-cutting waves. Desperate to lower capital expenditure, several Singaporean enterprises turned their attention toward these highly economical software options. Unfortunately, this honeymoon phase has not lasted long.

Decoding the High Failure Rates of Discount ERP

A stark reality in enterprise technology is that a staggering percentage of ERP projects fail to meet their objectives, with a massive portion of the remaining implementations left struggling in perpetuity. For many executives, this high failure rate is surprising. After all, Chinese manufacturers—whether one likes it or not—are successfully capturing global market share in sectors like electrical appliance, Electric Vehicles (EV) or renewable energy. Why, then, can their ERP software counterparts not replicate this global success?

The answer lies in the structural design of the reseller and implementation partner program. This framework is often the primary driver of these miserable project failures.

For careful prospects who insist on a detailed Proof of Concept (POC) process before purchase, Chinese ERP vendors actually hold no sustainable cost advantage over international competitors. While the initial software license might appear cheaper, the total cost of ownership over a five-year lifecycle quickly evens out. To bypass this barrier and make the cut, some vendors deploy a sales tactic common in their home market: decoupling the software sale from the delivery by shifting total responsibility to third-party resellers. To secure the contract, the primary vendor avoids signing the direct implementation contract with the customer. Instead, independent resellers do.

The Illusion of Low-Cost Consulting

Consequently, competition among these resellers is fierce, leading to highly unsustainable bidding behaviors. Fixed-price deployment contracts or stunningly low-priced consulting rates—sometimes quoted as low as RMB 1,500 (approximately SGD 280) per man-day—are frequently observed. For a system as operationally complex and cross-functional as an ERP, businesses must ask themselves: what level of business transformation or process optimization can an enterprise truly expect from a consultant charging RMB 1,500 a day?

A simple back-of-the-napkin calculation exposes the structural flaw in this model. Based on the public financial statements of leading Chinese ERP vendors, sales, marketing, and channel acquisition expenses frequently account for around 50% of total revenue. When you subtract these heavy customer-acquisition costs, factor in a razor-thin profit margin for the reseller, and account for mandatory corporate contributions like social insurance and housing funds, the math collapses.

The front-line consultants actually assigned to serve these clients are likely earning a net salary of just RMB 9,000 per month. In the enterprise technology space, compensation directly correlates with expertise. A salary at that level typically commands junior resources who lack the macro business acumen, industry-specific knowledge, and technical sophistication required to architect a robust corporate system.

Balancing Budget and Business Risk

The logical breakdown is clear, yet many companies remain willing to try their luck. A fundamental lack of deep internal technology expertise, paired with an overly budget-minded corporate culture, represents the top two common traits among these unlucky buyers. A challenging, unfavorable business environment only strengthens their determination to gamble on a low-cost solution. Regrettably, very few of them achieve a successful return on investment in the end. Instead, they find themselves stuck with half-baked systems that disrupt supply chains, distort financial reporting, and require expensive rescue projects to fix.

This trajectory sounds remarkably familiar to seasoned IT observers. The current approach of certain low-cost enterprise software models closely mirrors the challenges previously seen with low-tier offshore (mainly India, Indonesia and Vietnam) software development frameworks that prioritized headcount volume over delivery quality.

Singapore is a global city of excellence, and Singaporean enterprises traditionally seek long-term quality, scalable architecture, and strict data governance. In the realm of digital transformation, cheap but inferior software paired with underqualified implementation partners is never the answer. True cost optimization does not mean buying the cheapest tool; it means investing in a reliable solution and an experienced partner that ensures the project succeeds the first time.

Why We Write this Article?

This piece is authored by Sam Cheong, the Principal Consultant at Synchro RKK Sdn Bhd and one of Malaysia’s most respected business software authorities. Driven by a passion for complex problem-solving, Sam fell in love with Enterprise Resource Planning (ERP) architecture early in his career. Following a proven track record of high-impact deployments, he successfully acquired the ERP business unit from SRKK to found Synchro ERP. Today, he leverages his deep technical expertise and strategic vision to help organizations streamline operations, scale infrastructure, and navigate digital transformation. Witnessing the rising wave of compromised implementations in the region, Sam shares these insights to guide enterprises away from costly deployment pitfalls.

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In February 2024, Klarna’s CEO Sebastian Siemiatkowski told the world that the company’s AI assistant had taken on the work of 700 customer service agents. Headcount fell from 5,500 to 3,800. The story became the most cited example of AI replacing humans at scale. Boards across Asia, Europe, and the US used it to justify their own restructuring conversations.

Eighteen months later, Klarna was quietly rehiring. By February 2026, Siemiatkowski publicly admitted that the company had gone too far. Customer satisfaction had cratered. Software engineers and marketers were being pulled onto support lines to plug the gaps. The CEO who had once claimed AI could do every job, including his own, was now telling Bloomberg that the quality of human support was the new priority.

Klarna is not the cautionary tale of a single company that bet wrong on AI. It is the cautionary tale of a thinking error that most AI-driven reorgs are making right now.

The data on the thinking error

A Harvard Business Review article published in January 2026, authored by Thomas Davenport and Laks Srinivasan, surveyed 1,006 global executives in late 2025. The numbers landed hard. Sixty percent of organisations had already reduced headcount in anticipation of AI. Only two percent of those organisations had reached the point where AI was actually doing the work the cut humans used to do. Fourteen percent had AI solutions ready to deploy. Eleven percent were using AI in production.

The math is uncomfortable. Six out of ten companies had cut. Two out of a hundred had a working AI replacement for what they cut. The other 58 were either betting the gap would close before customers noticed, or quietly absorbing the work back into the humans who remained.

Davenport and Srinivasan called this AI washing. Companies using AI as the narrative cover for financial restructuring that they would have done anyway. Recent research from agentic AI vendors confirms the pattern: 55 percent of companies that executed AI-driven layoffs now regret the decision. Gartner projects that 40 percent of agentic AI projects will be cancelled outright by 2027.

This is not a problem about AI capability. It is a problem about how leaders are framing the question they are trying to answer.

Also Read: Why Japan’s booming AI market is harder to crack than it looks

What work-first design looks like

The companies getting AI team design right are not the ones starting with the question “how do we restructure for AI?” They are starting with a different question. What does the work itself actually want to look like now?

I call this Work-First Design, and the difference shows up in the outcomes.

At Tripadvisor, AI agents now handle 90 percent of incoming customer queries autonomously. The headline number sounds like Klarna’s. The strategy underneath is the opposite. Tripadvisor did not set out to eliminate human roles. The company set out to free the human support team for strategic work that required judgment, creativity, and relationship-building. The 90 percent automation rate enabled a 100 percent reassignment of human attention to work AI could not do. Thumbtack and ClickUp built similar models.

McKinsey research from 2025 found that companies which fundamentally redesign their workflows around AI are three times more likely to capture real value from the technology, and they generate twice the AI usage per employee. The redesign companies are also the ones building pod structures that work. Meta’s Reality Labs reorganised a large group into AI-native pods with roles like AI Builder, AI Pod Lead, and AI Org Lead. Engineers were expected to operate with broader range. Pods were required to own outcomes rather than isolated tasks.

The pods are not the point. The work redesign underneath is the point. Putting “Pod Lead” titles on top of a workflow that has not been redesigned just renames the old problem in new vocabulary.

This is where most reorgs fail. The leaders running them have been sold a structure. Pods, agents, AI-native teams. The structures are real and many of them work. But they only work if the work has been redesigned to fit. Drop a pod structure on top of a customer service workflow that still requires emotional judgment on 30 percent of cases, and you get Klarna. Drop the same pod structure on top of a workflow where AI genuinely handles 90 percent and humans handle the judgment-heavy 10 percent, and you get Tripadvisor.

The structure looks identical from the outside. The outcomes are not.

The Klarna pattern is going to repeat

The reason Klarna is going to keep happening is that work redesign is harder, slower, and less narrative-friendly than structural reorg. A reorg announcement makes the board happy. A six-month work redesign with no headlines does not.

Leaders are also being pushed by the wrong signals. Compensation benchmarks now reward AI fluency at every level. The PwC Global AI Jobs Barometer reports a 56 percent wage premium for AI-skilled workers. The labour market is telling leaders to hire AI talent fast and restructure around them. The temptation is to do exactly that, then figure out the work design later.

Later is when the customer satisfaction scores collapse. Later is when the engineers get pulled onto the support phones. Later is when the CEO has to tell Bloomberg that the strategy was wrong.

Also Read: AI is changing global expansion, but it cannot standardise local markets

I built and exited a SaaS company without taking venture capital. That meant I never had the budget to throw structure at problems. Every team I built had to match the shape of the work, because there was no spare capital to absorb a wrong design. That discipline turned out to be the most valuable constraint of my operating years. The companies that are now learning this lesson under AI pressure are learning it the expensive way.

The good news is that the lesson is learnable. The bad news is that the leaders most likely to ignore it are the ones with the most capital to throw at the problem first.

Three questions for leaders rethinking team design in 2026

What is the actual shape of the work after AI is genuinely doing what it can do, and what is left for humans?

If you removed every “AI” job title from your reorg plan, would the structure still solve a real problem, or does it only make sense as an AI narrative?

If your customer satisfaction scores or your output quality drop 15 percent in the six months after the reorg, what is your specific plan to recover them?

If the answer to the third question is “we will rehire,” you are not redesigning. You are doing a Klarna in slow motion. The cost of that mistake has now been documented in detail. There is no excuse left to make it.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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Global financial participants are currently facing significant downward pressure as macroeconomic factors shape investor behaviour across digital ecosystems. The total valuation of decentralised networks fell by 0.89 per cent to US$2.61T over the last 24 hours. This broad valuation decline of 1.18 per cent demonstrates how external monetary policy expectations directly influence risk asset pricing.

Sector observers now view digital tokens through a macroeconomic lens rather than focusing solely on internal network developments or software upgrades. The digital asset space today exhibits an 81 per cent correlation with gold over the past 30 days. This high correlation indicates that allocators treat these instruments as inflation hedges while simultaneously navigating rising interest rate expectations.

My perspective suggests that this environment demands extreme caution from everyone involved. Retail day traders often chase momentum without understanding the underlying macroeconomic triggers. Professional allocators prioritise capital preservation and carefully monitor communications from monetary authorities before deploying fresh capital into highly volatile instruments. Wealth managers recognise that traditional portfolio theories still apply to these novel asset classes during periods of extreme macroeconomic stress.

Federal Reserve Chair Kevin Warsh delivered a pivotal speech at Jackson Hole on August 28. He explicitly cited elevated inflation levels and stated that the monetary authority still has necessary work to complete regarding policy tightening. This hawkish rhetoric immediately reset trading expectations and triggered a notable rise in Treasury yields. Investors rapidly repriced the probability of a September interest rate increase to a near coin flip. This sudden shift in rate expectations directly pressures risk assets and forces a broad revaluation across the financial spectrum.

Digital currencies are highly rate-sensitive assets in the current environment. Prices move in direct response to shifts in monetary policy expectations rather than to internal technological catalysts or adoption metrics. I believe that policymaker communications will continue to dominate price action until inflation data shows a definitive and sustained decline.

Participants must closely watch the upcoming Federal Open Market Committee meeting on September 15 to 16. Any pre-meeting commentary from policy officials will likely introduce further volatility and force investors to adjust their leverage positions accordingly. Analysts expect multiple speeches from regional bank presidents before the official blackout period begins.

Also Read: Who really moves Bitcoin now: nine straight days of Fidelity buying exposes the new power structure

Bitcoin specifically underperformed the broader digital ecosystem during this recent downturn. The leading cryptocurrency declined by 0.55 per cent to US$77,740.01. This price action coincided with a sudden reversal in institutional buying patterns. United States spot Bitcoin exchange-traded funds recorded a US$201.9M net outflow on August 28. This significant outflow abruptly ended a remarkable nine-day streak during which US$3B flowed into these financial products. The combination of a less favourable macroeconomic backdrop and a sudden pause in institutional buying pressure serves as the primary catalyst for the recent price decline.

Institutional demand remains highly sensitive to interest rate trajectories. Exchange-traded fund flows must return to positive territory to prove that institutional buyers possess enough resilience to ignore hawkish policy rhetoric. Sellers rejected Bitcoin near the US$79,000 to US$81,000 resistance zone. The asset now tests an immediate foundational floor near US$77,500. A decisive daily close below this level will likely trigger further algorithmic selling toward the US$73,000 to US$74,650 Fibonacci demand cluster. Market makers will closely monitor order book imbalances to gauge genuine spot demand during this critical testing phase.

The broader ecosystem decline also exposed severe weakness in alternative cryptocurrencies. Capital aggressively rotated out of smaller assets and flowed back into the sector leader. The Altcoin Season Index plummeted 31.58 per cent over the past week. This dramatic drop highlights a clear defensive shift in portfolio positioning. Investors actively reduce risk exposure in higher-beta assets when macroeconomic uncertainty increases.

Bitcoin dominance presently sits at 59.69 per cent as participants seek relative safety. This capital rotation amplified the overall valuation decline and created severe liquidity issues across decentralised exchanges. The derivatives arena experienced a massive leverage flush that accelerated the downward price movement. Total liquidations reached US$42.38M over the last 24 hours. This figure represents a massive 283 per cent spike from the previous trading session.

Bitcoin long liquidations alone accounted for US$13.97M of this total. Buyers quickly unwound a heavy buildup of leveraged long positions as prices dipped. This forced liquidation cascade is a symptom of the broader sell-off rather than its root cause. Derivative open interest today totals US$385.85B, which suggests that participants still maintain substantial leveraged exposure. Exchange risk engines automatically close out underwater positions to prevent systemic contagion across the broader trading ecosystem.

Also Read: Bitcoin touched US$81,000: Was that a rally or a forced repricing?

The immediate path forward hinges entirely on specific technical price bases and the upcoming monetary policy meeting. The overall digital ecosystem must hold the US$2.49T to US$2.57T lower boundary. This zone represents the 38.2 per cent to 23.6 per cent Fibonacci retracement levels.

Defending this area could trigger a rebound toward the US$2.7T swing high if bets on a central bank rate hike cool off. Conversely, a break below US$2.49T will likely signal a much deeper correction ahead of the September policy decision. Sentiment is currently in the “greed” territory, with the index reading 74. This elevated sentiment reading suggests that the current pullback might simply represent a healthy consolidation phase if buyers step in to defend key demand zones. I maintain a neutral-to-bearish short-term bias as the ecosystem digests the recent hawkish messages and resets leverage ratios.

The Asian trading session has not opened at the time of writing this analysis. The upcoming Asian trading hours will likely provide crucial liquidity and reveal whether buyers will defend these critical technical cushions or allow the bearish momentum to continue. Retail sentiment indicators often lag behind actual institutional positioning by several days.

Professional observers now focus entirely on order book depth and spot volume to gauge genuine buying interest. The recent price rejection at higher levels proves that sellers still control the immediate pricing structure. Institutional allocators require sustained spot-buying volume to confirm a genuine trend reversal rather than a temporary dead-cat bounce.

The Asian session opening will provide the first major test of these critical demand zones since the Jackson Hole speech. Liquidity providers will likely widen spreads during this transition period to protect themselves against sudden spikes in volatility. Participants must respect these macroeconomic realities and avoid catching falling knives during high-impact central bank weeks.

My final viewpoint emphasises patience above all else. Rushing into leveraged positions right now invites unnecessary risk. Waiting for clear daily closes above resistance or confirmed bounces off technical cushions provides a much safer framework for capital deployment. The coming weeks will separate emotional day traders from disciplined professionals. Successful navigation of this complex environment requires strict adherence to predefined risk management rules.

—

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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Southeast Asia’s venture capital market has stopped falling off a cliff. That does not mean it has bounced back.

According to the “Southeast Asia Startup Funding Report for 2025” by DealStreetAsia and Kickstart Ventures, the region closed the year with just 461 equity deals, the lowest annual deal count since at least 2018. The headline numbers suggest some warmth returned to the market in the second half of the year, but the underlying pattern points to something more permanent: a leaner, more selective funding environment where capital is available, but only for companies that can show discipline, governance and a credible path to durable growth.

Also Read: Growing SEA startups with Kickstart Ventures

For founders, this is a very different market from the one that shaped Southeast Asia’s last startup cycle. The old promise was simple: grow quickly, raise larger rounds, and use capital to win market share across a fragmented region. In 2025, that playbook looked increasingly outdated. Investors did write cheques again, but they did so with far more caution.

A recovery that looks bigger than it is

On paper, Southeast Asia had a stronger second half. Total equity funding rose to US$3.51 billion in H2 2025, up sharply from US$1.86 billion in the first half. But that increase was driven by a small number of large late-stage and growth transactions, rather than a broad reopening of the market.

The clearest example was Princeton Digital Group’s US$1.3 billion private equity growth round from Stonepeak. Deals of that size can change the region’s aggregate funding data almost single-handedly, especially in a year when overall deal volume remained weak. The number of transactions barely moved between the two halves of the year, rising from 228 in H1 to 233 in H2.

Minette Navarrete, President and Managing Partner of Kickstart Ventures, described the shift as “stabilisation rather than a rebound”, noting that the consistency in deal activity suggests the market has found a “functional floor”. Her point matters because Southeast Asia’s funding correction is no longer just a cyclical pause after the cheap-money years. It is starting to look like a structural reset.

The capital that is returning is not being spread evenly. It is concentrating around companies with clearer revenue models, stronger controls and a better chance of surviving without constant external funding. In other words, investors are no longer paying for the possibility of scale alone. They want proof.

Late-stage opens, early-stage stays tight

The most visible split is between late-stage companies and younger startups. Late-stage financing, which had largely frozen during the downturn, reopened in the second half of 2025. Late-stage deal volume more than doubled to 24 transactions in H2, from 10 in H1.

That helped Southeast Asia mint four new unicorns in 2025, compared with just one in 2024. They included Singapore-based healthtech company Ultragreen.ai and digital asset bank Sygnum, whose US$58 million growth round pushed it past the billion-dollar valuation mark.

But the recovery at the top has not eased pressure at the bottom. Seed-stage founders still face a difficult fundraising market. Median seed valuations fell to US$2 million in 2025 from US$2.5 million in 2024, showing that investors remain cautious at the market’s entry point.

Also Read: “Don’t ‘out-bro’ your male colleagues”: Kickstart’s women leaders on gender diversity in VC

The one area of early-stage relief came from companies that had already reduced execution risk. Series A and Series B startups with evidence of traction found a more receptive audience. Median Series B valuations rebounded to US$17.8 million from US$10 million in 2024, suggesting investors were willing to pay up but only when businesses could show that customers were buying, margins were improving, or expansion plans were grounded in hard data.

Mathias Imbach, co-founder and Group CEO of Sygnum, said institutional discipline has become unavoidable. “Rigorous due diligence processes from institutional investors led to defendable valuation models,” he said. “The key challenge was finding the lead. Once you have a lead investor, things tend to fall into place.”

That comment captures a broader market truth. The lead investor has become the gatekeeper. Without one, even promising companies can struggle to build momentum.

The end of growth at any cost

The philosophical shift may be even more important than the funding numbers. Southeast Asia’s startup ecosystem spent years borrowing from the Silicon Valley growth model, even though the region works very differently.

Unlike the US or China, Southeast Asia is not a single large market. It is a collection of economies with different languages, regulations, payment systems, logistics networks and consumer habits. Expanding from Indonesia to Vietnam, or from the Philippines to Thailand, can feel less like entering a neighbouring market and more like rebuilding the business from scratch.

That makes subsidised hypergrowth expensive and often fragile. Several highly funded companies in the region have already shown how quickly growth can unravel when it depends too heavily on discounts, cheap capital or aggressive expansion assumptions.

Logan Tan, co-founder and CEO of e-procurement platform Eezee, put it plainly: “You can’t just copy the ‘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.”

Eezee’s own numbers reflect the new mood. The company grew revenue by 72 per cent year on year while narrowing its net loss by 36 per cent for the fiscal year ending March 2024. Tan argued that “revenue and profitability are the best insulation against funding slowdowns”, a view increasingly shared across boardrooms and investment committees.

Large corporates are applying the same discipline. Globe President and CEO Carl Cruz said inflation and competition have sharpened the focus on capital expenditure discipline.

Ayala Corporation President and CEO Cezar Consing has similarly noted that larger allocations now flow to mature platforms that can generate returns in a higher-interest-rate environment, even as some capital remains reserved for earlier bets.

Strategic capital gains ground

As financial VC has become more selective, corporate venture capital and strategic investors have taken on greater importance. For founders, the appeal is not only the cheque. In Southeast Asia, strategic backers can offer market access, regulatory support, customer relationships and credibility with enterprise buyers.

This is especially valuable in sectors such as deeptech, infrastructure, fintech and climate tech, where sales cycles are long and trust matters. Rohit Jha, CEO of Transcelestial Technologies, said the company leans on strategic investors’ networks for “on-the-ground access, procurement trust, and market navigation”. For a company building laser communications systems, investors with links to Japan, Australia or telecom infrastructure buyers can be as important as the capital itself.

The exit problem remains

The biggest unresolved issue is liquidity. IPO and M&A activity in Southeast Asia remains muted, making it harder for venture funds to return capital to their own investors.

Edgar Hardless, CEO of Singtel Innov8, described the lack of exits as one of the region’s biggest challenges. High valuations from the previous cycle have made local acquisitions harder, while public markets have not reopened meaningfully for venture-backed companies.

Also Read: Inside SEA’s AI gold rush: The 20 investors writing the biggest cheques

Until that changes, investors are likely to stay selective. Secondary sales may provide some relief, but they are not a substitute for a healthy exit market.

Southeast Asia’s startup ecosystem is not broken. It is becoming more demanding. The next cycle will likely produce fewer companies built on speed alone, and more built on sharper economics, stronger governance and a clearer reason to exist. For founders, that may feel harsher. For the region, it may be healthier.

The post Southeast Asia startup funding finds a floor, but not a rebound appeared first on e27.

Every trend deck this year has the same slide: consumers are turning against AI-generated marketing, Coca-Cola’s AI holiday ad got mocked as “soulless,” 78 per cent of people say AI makes ads feel less authentic, and the smart move for 2026 is to hide the AI and put humans back in front of the camera.

It’s a real, well-documented shift, mostly built on US and European data. And Southeast Asian marketers are quietly importing it wholesale, which is a mistake, because the region’s own data tells a meaningfully different story.

The narrative everyone is copying

The Western backlash is not exaggerated. Research unveiled at Cannes Lions in June 2026 by The Harris Poll, the 4As and Infillion found 78 per cent of consumers say AI makes ads feel less authentic, 73 per cent are less likely to trust an ad they suspect was AI-made, and 63 per cent are less likely to buy from a brand using AI-generated ads; more than two-thirds of consumers now view AI in advertising as largely a “marketing ploy.”

Coca-Cola’s AI-produced version of its “Holidays Are Coming” campaign drew enough public mockery that it became the go-to case study for what not to do. Brands are hiring people specifically to produce proof-of-human “behind the scenes” content, because “we made this ourselves” has become an actual selling point.

That’s a real pattern. It just isn’t Southeast Asia’s pattern.

What the region’s own data actually shows

Two things are true in Southeast Asia at once, and most trend pieces only report one of them.

First: the region is not reflexively hostile to AI production the way US audiences increasingly are, but the picture is more specific than “SEA doesn’t care.” A peer-reviewed 2026 study of 400 Gen Z social media users in Da Nang, Vietnam (Business Perspectives / Innovative Marketing journal) found that disclosing AI use actually increased trust (β = 0.469, p < 0.001), which in turn predicted purchase intention, a direct contrast to the Western pattern where suspected AI use erodes trust.

Also Read: The funnel was never neutral: What Asia&#8217;s markets reveal about Western marketing theory

A separate PLS-SEM study of 387 Indonesian TikTok users found AI labels raised viewers’ awareness of the ad but only reduced attitude toward hedonic, impulse-type products, not the broad rejection Western data shows across categories. The signal is consistent: SEA audiences aren’t punishing AI transparency, and in at least one documented case, honesty about AI actively builds trust rather than eroding it.

Second, and this is the part that actually matters commercially: whatever a brand’s stance on AI, human trust still overwhelmingly decides the sale. The 2026 eCommerce Influencer and Affiliate Marketing in Southeast Asia report from impact.com, Cube and Dentsu, based on 2,400 consumers across six SEA markets, found recommendations from family and friends are the single strongest purchase driver (2.42 out of 4), ahead of both online reviews (2.36) and creator recommendations (1.98), and that two in three respondents (67 per cent) had bought something specifically because a creator recommended it.

Generative AI has become a real part of product discovery, with 24 per cent of consumers now using tools like ChatGPT, Gemini or Claude to support shopping decisions, and adoption reaching 34 per cent in Vietnam and 31 per cent in Indonesia, the two fastest-adopting markets in the region. But online marketplaces still dominate both discovery (71 per cent) and where purchases are actually completed (88 per cent), and nearly half (49 per cent) of affiliate-driven purchases were motivated by trust and validation rather than price or convenience.

AI is a research layer sitting on top of a decision that trust, not algorithmic polish, still closes, and the report projects that by end-2027 roughly one in five SEA shoppers will complete a purchase natively through a generative AI platform, meaning this dynamic is intensifying, not settling.

Put those findings together and the regional picture looks meaningfully different from the Western one: SEA audiences aren’t reflexively punishing a brand for using AI, and disclosing it can even help. What they consistently punish is a brand with no human credibility behind it when the moment of decision arrives.

A related Cube study commissioned by Lazada found “authenticity-led” e-commerce, verified stores, trusted brands, credible reviews, has grown from 12 per cent of regional online retail sales in 2020 to 30 per cent in 2025, and is projected to reach 55 per cent by 2030. That is the real curve to watch, and it isn’t an anti-AI curve. It’s a pro-trust one.

The line isn’t AI vs human, it’s real vs performed

Where the region does draw a line, the Da Nang study offers a clue most trend pieces miss: the trust-building effect of AI disclosure was strongest among consumers who scored high on collectivistic orientation, meaning the value of admitting “this was AI-assisted” is tied to social and relational trust norms specific to the market, not a universal reaction to the technology itself.

That is a fundamentally different mechanism from the West’s “AI equals inauthentic” reflex. The offense in SEA isn’t the technology. Based on this research, it looks closer to deception: content engineered to disguise itself as an organic, personal opinion when it isn’t one.

This also tracks with a broader pattern in newer digital economies. Peer-reviewed research comparing consumer responses to AI-generated advertising in Vietnam and Australia, based on 839 collected responses, found the two markets process AI-made video ads differently enough that the study’s authors point to cultural dimensions like uncertainty avoidance as an underexplored factor.

Also Read: AI didn&#8217;t replace Southeast Asia&#8217;s marketing agencies, it repriced them

A market still in the process of establishing baseline digital trust in e-commerce evaluates new content differently than one that has already developed fatigue and suspicion toward synthetic media by default, which is closer to where the US now sits after roughly three years of AI-generated content flooding social feeds.

Several SEA markets simply haven’t reached that saturation point yet, and industry commentary from a recent Singapore ad-tech panel has floated the same idea from the operations side: that the region’s creator-anchored social commerce model may not follow the US trajectory into an “AI content flood” at all.

What this actually means for marketing teams here

• Stop copying the “hide the AI” playbook wholesale. The instinct to scrub every AI fingerprint from your output is solving a problem that current regional evidence suggests mostly exists in Western markets. Disclosing AI involvement has been shown to build trust in at least one SEA market, not erode it, so treat “we don’t hide our AI use” as a potential asset, not a liability.
• Protect the line that does matter: don’t fake spontaneity. AI-assisted product content that’s honest about being AI-assisted appears to perform fine, or better, with SEA audiences. AI-generated content staged to look like an unprompted, organic customer opinion is where the deception, not the technology, does the damage, and it’s also the area most exposed as platforms and regulators start scrutinising undisclosed synthetic endorsements.
• Treat creators and word-of-mouth as infrastructure, not a bolt-on. With family and friend recommendations and creator trust still outperforming both reviews and AI as purchase drivers, the ROI case for creator partnerships in SEA is arguably stronger post-AI than pre-AI, not weaker.
• Watch Vietnam and Indonesia specifically. They’re both leading regional AI adoption in product discovery and sitting in a digital-trust-building phase where credibility cues matter more than production origin. That combination rewards brands that pair AI-assisted efficiency with genuinely credible, verifiable claims, not brands that either over-rely on AI or over-correct into performative “100 per cent human” theatre.

The uncomfortable part for a lot of regional marketing teams

The convenient story is that Southeast Asia is simply a few quarters behind the US on the same backlash curve, and the smart move is to pre-empt it. The regional data doesn’t clearly support that. It suggests a market running on a different trust mechanism entirely, one where the scandal isn’t “a machine helped make this,” it’s “you tried to make a machine’s output pass as somebody’s honest opinion.”

Brands spending 2026 anxiously stripping AI fingerprints out of product content may be solving last year’s American problem while missing the one actually sitting in their own market: whether anything a real customer would vouch for is still standing behind the campaign at all.

—

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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The post The AI marketing backlash story doesn’t actually fit Southeast Asia appeared first on e27.

For many Filipino households and small businesses, solar power still looks like something built for wealthier homeowners: panels on a roof, a sizeable upfront bill, permits, installation work, and the assumption that the customer owns the property in the first place.

Lumio Solar is betting that the next wave of adoption will look far more ordinary. A fan. A freezer. A light. A portable power station.

The Pampanga-based startup has raised US$900,000 in pre-seed funding to build a distribution and service network for solar-powered appliances and equipment across the Philippines.

Also Read: An investor’s outlook on solar energy in emerging Asia

The round was led by 100×100, the Southeast Asia climate venture builder formerly known as Wavemaker Impact. Lumio plans to use the capital to expand its product portfolio, strengthen hub operations, and build after-sales infrastructure, starting with Central Luzon and Metro Manila before moving into provincial and archipelagic markets.

The company serves households, micro, small and medium enterprises (SMEs), agribusinesses, and institutions that are often left out of the rooftop solar market. Its products include solar fans, lights, freezers, and portable power stations that require little to no installation.

“The future of solar isn’t just panels on rooftops. It also belongs in household and commercial products to bring reliable, affordable energy to power everyday life around the world,” said Rey Sunglao, Founder and CEO of Lumio Solar.

Why appliances, not just panels

The Philippines has some of the most expensive electricity in Southeast Asia, a burden that cuts across income groups but hits small businesses and rural communities especially hard. For a sari-sari store, a fish vendor, or a small farm operation, power is not only a household expense. It can decide whether food stays cold, whether work continues after sunset, or whether diesel backup becomes another recurring cost.

At the same time, the country is entering a period of rapid solar growth. Solar generation in the Philippines is projected to grow 17.4 per cent annually through 2050, according to figures cited by Lumio. But rooftop solar adoption remains constrained by familiar barriers: high upfront costs, installation requirements, limited roof space, and property ownership issues.

Those constraints are common across Southeast Asia. In dense cities such as Manila, Jakarta and Ho Chi Minh City, many families live in rented homes or multi-unit buildings where installing rooftop panels is either impractical or impossible. In island and rural communities, logistics and maintenance can be as big a challenge as affordability.

Lumio’s answer is to unbundle solar from the rooftop. Rather than asking customers to invest in a full system, the company wants to sell appliances that generate or store their own energy and can be used immediately. The goal is not to replace grid-scale renewable energy or home solar systems, but to create a lower-friction entry point for customers who cannot access either.

According to Lumio, its solar appliances cost 10 per cent to 90 per cent less to operate than conventional alternatives and can reduce at least 50 per cent of electricity-related emissions. The range currently includes practical products such as fans, lighting, freezers and power stations, items that have clear use cases in both homes and small commercial settings.

Distribution is the hard part

Consumer solar is not only a hardware problem. In markets such as the Philippines, the harder task is often distribution: getting products to customers outside affluent urban centres, explaining how they work, offering financing or payment flexibility, and providing repairs when something breaks.

That is where Lumio wants to position itself. The startup is building what it calls distribution infrastructure for consumer-ready solar appliances, supported by local hubs and after-sales service. This is particularly important in the Philippines, where geography can turn even simple logistics into a complex operation. A model that works in Metro Manila may not automatically work in Bicol, Eastern Visayas, Mindanao, or smaller island communities.

Sunglao brings a retail-heavy background to the task. He has more than two decades of experience in commercial operations, partner networks and omnichannel growth for Philippine consumer businesses, including senior roles at SM Malls Online, the e-commerce and lifestyle platform of SM Supermalls.

Also Read: Southeast Asia’s solar industry faces US tariffs and new trade realities

That experience matters because Lumio’s challenge is closer to building a consumer distribution business than a traditional energy company. The startup will have to win trust in neighbourhoods, farms and small enterprises that may be interested in saving on power bills but cautious about unfamiliar devices and maintenance promises.

Marie Cheong, Partner at 100×100, said the fund backed Lumio because rooftop solar still excludes a large part of the market.

“Filipino households and small businesses are now paying the highest electricity rates in Southeast Asia, yet traditional rooftop solar remains out of reach for most because of the upfront cost and property constraints,” she said. “Lumio is solving this with a fundamentally different model, plug-and-play solar appliances that meet households and businesses where they are.”

100×100 has positioned itself around venture building for emissions-heavy sectors in Southeast Asia and India, including agriculture, energy, industry, materials and buildings. The firm says each company it builds is designed to abate 100 million metric tonnes of CO2e and generate US$100 million in annual revenue. It has co-founded 27 companies across eight Asian countries and launched a US$100 million second fund in 2026 to build 50 new climate companies.

A crowded but fragmented market

Lumio enters a market where the broader solar category is already active, but fragmented. In the Philippines, companies such as Solar Philippines, Buskowitz Energy, Solaric and Solenergy have focused largely on rooftop, commercial, industrial or utility-scale solar. Globally, portable power brands such as EcoFlow, Bluetti and Jackery have popularised solar generators and battery stations, including across parts of Southeast Asia.

Lumio’s distinction is its focus on consumer and small-business appliances, paired with localised distribution and servicing. That may give it a clearer route into underserved customers than premium imported gadget brands, but it also means the company will have to compete on price, reliability and availability, not just climate impact.

The opportunity is significant. Across Southeast Asia, rising power demand, heatwaves, unreliable grids in some regions, and pressure to cut emissions are pushing more consumers to consider distributed energy products. But adoption will depend less on abstract decarbonisation goals and more on whether the products solve daily problems at an affordable cost.

For Lumio, that means proving that solar can be sold not as a large infrastructure investment, but as a practical appliance upgrade. If it succeeds, the company could help broaden the region’s view of what household solar looks like, from panels installed on rooftops to everyday devices that quietly reduce power bills one use case at a time.

Also Read: Singapore’s rent-to-own solar startup Solar AI bags US$1.5M seed financing

The next phase will test whether that idea can scale beyond early adopters. Lumio is beginning in Central Luzon and Metro Manila, two markets with different but complementary advantages: one with dense commercial and household demand, the other with strong links to agriculture and provincial enterprise. From there, the company plans to expand into more provincial and island markets.

That expansion will determine whether Lumio is simply selling solar-powered products, or building the kind of last-mile energy distribution network that Southeast Asia’s uneven energy transition increasingly needs.

The post Lumio Solar raises US$900K to bring plug-and-play solar appliances to Filipino households appeared first on e27.

Southeast Asia has become one of the world’s most closely watched startup ecosystems.

From fintech and e-commerce to logistics, SaaS, AI and digital financial infrastructure, the region has produced companies that have grown from local experiments into billion-dollar businesses. But for founders, there is another side to the story.

Raising venture capital in Southeast Asia has never simply been about having a great idea. Investors are seeing more startups, more sophisticated founders and increasingly ambitious business models. At the same time, the funding environment has become more selective.

So what actually makes a startup stand out? The answer isn’t always revenue. And it isn’t necessarily a huge market-size slide either.

Talk to experienced investors across the region and a few themes come up again and again: the quality of the founder, a deep understanding of the problem, evidence of product-market fit, strong economics, the ability to execute, and a credible path to becoming a much bigger company.

To understand what investors are really looking for, I looked at the views of several investors who have spent years backing technology companies across Southeast Asia. Their advice offers a useful reality check for founders preparing to raise their next round.

Peng T. Ong: Founder and Managing Partner, Monk’s Hill Ventures

Peng T. Ong has been investing in technology companies for years, but his approach to evaluating startups is remarkably straightforward. In a 2023 essay titled What I Look For in Startups, Ong laid out the characteristics he believes can help a startup scale quickly and significantly.

What he looks for

One of Ong’s biggest priorities is defensibility. He argues that startups should be able to accumulate differentiated, proprietary information as they grow. The idea is simple: the company should become harder to copy as it gets bigger, rather than simply becoming bigger.

Economics matter too. Ong specifically highlights positive unit economics and strong gross margins. His preference is for businesses that can potentially achieve gross margins above 50 per cent, although he also recognises that some businesses can become attractive through large absolute gross profits even when percentage margins are lower.

Then there is retention. Ong introduces the idea of R + K, where R represents retention and K represents the virality coefficient. His argument is that startups should aim for a product where retention and organic growth can eventually reduce dependence on continuously spending money to acquire customers.

He also looks for natural lock-in. A product becomes increasingly valuable when customers have a reason to stay whether because of accumulated data, workflows, relationships or other features that make switching difficult.

And then comes what Ong calls “hyper-kaizen”: the ability of a company to continuously make significant improvements to important business metrics.

But perhaps his most interesting point is about the founder. Ong describes the ideal entrepreneur as a “philosopher-warrior-nurturer.” The philosopher understands the deeper “why” and thinks clearly about the business. The warrior turns that thinking into action. And the nurturer builds the people and culture needed for the company to keep growing.

The takeaways for founders

The takeaway is bigger than simply “grow fast.” Investors want to see whether your growth is creating a stronger company.

Are customers staying? Are your economics improving? Is your product becoming harder to replace? Are you building proprietary advantages? And ultimately, are you the kind of founder who can keep improving the company as it gets more complicated?

For Ong, those questions are just as important as the headline growth numbers.

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Khailee Ng: Managing Partner, 500 Global

Few investors have been as closely associated with Southeast Asia’s startup ecosystem as Khailee Ng. Ng joined 500 Global after building and exiting two startups and went on to lead the firm’s first Southeast Asia-focused fund. 500 Global says he has led more than 300 investments across Southeast Asia, including early investments in companies such as Grab, Carsome, Carousell, Bukalapak and FinAccel.

What he looks for

Ng has a particularly important message for founders: founder-market fit can matter just as much as product-market fit. In a 500 Global interview, he explains that the firm wants founders who genuinely care about what they are building and have a personal advantage when it comes to understanding the problem.

That makes sense. Two founders can build similar products, but the founder who has spent years living the problem may understand the customer, the industry and the market in a way that competitors cannot easily replicate.

Ng also wants founders who are willing to build ambitiously. That doesn’t necessarily mean saying you want to become the “Uber of Southeast Asia.” In fact, Ng has challenged the assumption that every Southeast Asian startup must follow the same regional expansion playbook. In a later 500 Global interview, he argued that founders should question the assumption that a Malaysian company automatically needs to expand to Singapore and Indonesia market.

The power of being hyperlocal

There is another lesson from Ng’s experience with Grab that deserves attention. In a 500 Global analysis of Grab’s rise, Ng describes the company’s execution-oriented and hyperlocal approach as a major strength.

Grab didn’t simply build one product and assume that every market would behave in the same way. Instead, the company developed deeply local leadership teams that understood individual markets and had the relationships needed to operate within them. That approach helped Grab navigate the complexity of Southeast Asia while building a much larger regional business.

The takeaways for founders

There is an important paradox here. To build a regional company, you often need to become more local, not less.

Founders sometimes think regional expansion means standardising everything. But in Southeast Asia, localisation can be a competitive advantage. The companies that win may be those that combine a common technology platform with a deep understanding of individual markets.

Don’t confuse regional ambition with regional expansion for its own sake. Your investors want to know how big the company can become, but the path doesn’t have to look the same for every startup.

The right question isn’t: “Which Southeast Asian country should we enter next?” It is: “Where does our business have the strongest opportunity to build a large, defensible company?”

That might be Indonesia. It might be Singapore. It might be the United States, India, Bangladesh or somewhere else entirely. The business model should determine the expansion strategy not the other way around. Depending on the business, another international market might actually make more sense. That is a useful distinction.

Golden Gate Ventures: Backing audacious founders

Golden Gate Ventures has been investing in Southeast Asia since 2011 and has built a portfolio spanning Singapore, Indonesia, Vietnam, Malaysia, Thailand and the Philippines. The firm’s portfolio includes companies such as Carousell, Ninja Van, Carro, Xendit and Funding Societies.

What they look for

Golden Gate describes its philosophy in unusually direct language: “We fund and learn from the audacious.” The firm says it works with founders on long-term vision and strategy, while also helping portfolio companies with areas ranging from product development and technical strategy to growth.

One important part of Golden Gate’s approach is its regional perspective. Southeast Asia isn’t one market. Consumer behaviour can change dramatically from country to country. Regulations differ. Payment systems differ. Logistics networks differ. Language and culture differ.

For founders, that means a successful business model cannot always be copied and pasted from one country into another. Golden Gate’s own approach reflects this reality. The firm says it has invested deeply across six Southeast Asian markets and maintains local relationships that can help companies expand across the region.

The takeaways for founders

When investors ask about your expansion plans, don’t simply show a map covered with flags. Explain why each market makes sense.

What is similar? What needs to change? What local partnerships will you need? How much will customer acquisition cost? And can the business maintain attractive economics while expanding?

The best regional startups aren’t necessarily the ones that enter the most countries. They are the ones that know where to expand, when to expand and how to adapt.

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Shiyan Koh: Managing Partner, Hustle Fund

Shiyan Koh has spent years looking at Southeast Asia from the perspective of an early-stage investor. As Managing Partner at Hustle Fund, she has written extensively about where she sees opportunities emerging in the region, particularly in AI, fintech and businesses with global potential.

What she looks for

Koh sees a particularly interesting opportunity in AI applications for industries that have historically been underserved by software. Her argument is that Southeast Asia has many industries where large language models and other AI technologies could create highly specialised software.

The opportunity isn’t necessarily to build another generic AI chatbot. It could be software designed specifically for farmers, call centres, medical coding, virtual assistants or other industries where local knowledge and specialised workflows create an advantage.

Koh also sees significant opportunities in fintech. She points to the region’s large underbanked population and the need for better financial infrastructure, including areas such as credit scoring and KYC.

But perhaps her most important message is about ambition. Koh argues that Southeast Asian founders should think about global potential from day one. That is partly because the region still has a relatively limited number of companies capable of producing very large venture outcomes. For startups with global ambitions, she believes the international strategy needs to be considered early rather than added as an afterthought.

The takeaways for founders

Don’t assume that being based in Southeast Asia means your company has to remain a Southeast Asian company.

Your initial market may be local. Your customers may be local. Your first product may solve a very specific regional problem. But if the underlying technology or insight can travel, the opportunity could be much larger. The key is to identify that potential early.

What Southeast Asian investors really look for

Put all these perspectives together and the pattern becomes surprisingly clear. Investors aren’t simply looking for the next big idea. They’re looking for evidence that the founder can turn an insight into a large, durable business.

• Founder-market fit: Why are you the person to solve this problem? Khailee Ng’s point about founder-market fit is particularly important here. If you’ve lived the problem, worked in the industry or spent years understanding the customer, explain that advantage.
• Product-market fit: Investors want evidence that people actually want what you’re building. That evidence doesn’t always have to be millions in revenue. It could be retention, engagement, repeat customers, strong growth or another meaningful signal that customers are pulling the product into the market.
• Strong economics: Growth purchased entirely through expensive customer acquisition isn’t enough. Investors increasingly want to understand your unit economics, gross margins and the path toward a sustainable business. Peng Ong’s framework makes this especially clear.
• Defensibility: What becomes harder to copy as you grow? Proprietary data, network effects, customer relationships, switching costs, technology, distribution or brand can all contribute to a competitive moat. But founders should be able to explain exactly why their advantage compounds over time.
• Execution: A brilliant strategy means very little if the team can’t execute it. Investors want to see founders who can build, sell, hire, learn and adapt. The ability to keep moving when something goes wrong is often more valuable than having a perfect plan.
• Local understanding: Southeast Asia’s diversity creates huge opportunities, but it also creates complexity. Founders need to understand the differences between markets rather than treating the region as one giant customer base.
• A credible path to scale: Finally, investors need to believe that the company can become much bigger. That doesn’t necessarily mean entering every Southeast Asian country. It means having a believable answer to one fundamental question: how does this become a very large company?

Also Read: Why the smartest founders are interviewing investors before investors interview them

Conclusion

The Southeast Asian startup story is still being written. The region has the talent, consumers, technology and entrepreneurial energy to produce much larger companies in the years ahead. But as the ecosystem matures, investors are becoming more selective.

The founders who stand out won’t necessarily be the ones with the flashiest pitch decks. They’ll be the ones who can demonstrate something much harder to fake: deep market knowledge, genuine customer demand, strong economics, exceptional execution and a reason to believe their company can become much bigger.

And there is one final lesson worth remembering. Don’t pitch Southeast Asia simply as a huge market. Show investors why your team has earned the right to win in it.

Explain the problem. Show the evidence. Demonstrate the economics. Tell them why your company is difficult to copy. And then show them where the business can go next.

Because ultimately, investors aren’t funding a PowerPoint presentation. They’re betting on the people who are going to build the company. And in Southeast Asia’s increasingly competitive startup ecosystem, that distinction matters more than ever.

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