From tariffs on Chinese tech to US export restrictions and retaliatory measures from Beijing, the new era of global trade fragmentation is reshaping the investment playbook for Southeast Asia’s venture capitalists. Once a peripheral concern, geopolitics is now front and centre—redefining how, where, and why capital is deployed across the region.
While many Southeast Asian startups remain shielded from the immediate impacts of the global tariff wars—particularly those in software and services—the reverberations are impossible to ignore. Slower exit timelines, investor caution, and a cooling appetite for cross-border M&As are testing VC patience and portfolio resilience.
Yet amid the volatility, a new investment thesis is crystallising: one that prizes adaptability, regionalisation, and geopolitical fluency.
In this feature, some of the region’s prominent venture capitalists discuss how they and their portfolio companies are navigating the new trade war terrain and adapting to a new era of global trade tensions.
Eddie Thai, co-founder and General Partner of Ascend Vietnam Ventures (AVV)
The tariffs focus on goods, meaning software-only and service companies are not yet directly affected. Many startups will be affected; up to 10 of our 80 active portfolio companies are directly adversely affected. Plus, those serving one or several countries targeted by the tariffs are also likely to be affected, at least indirectly (by depressed growth, higher near-term unemployment, etc.)
Further, the global trade war seems likely to extend exit timelines and/or depress exit values worldwide, particularly for companies with direct and concentrated exposure to the US and/or targeted countries.
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Southeast Asian VCs, as a category, were already seeing headwinds in raising capital given the extended time horizons on liquidity compared to their counterparts in the US and certain other markets. The trade war will make it worse in the near term. More generally, capital allocators worldwide will likely be “risk off” as they wait to see how things shake out. There should be more clarity about the macro picture within the next 12 months.
In addition, VC and PE funds in the region have dry powder. Those willing and able to invest in great founders in this tough time can unlock big wins five to ten years from now. AVV has roughly 50 per cent of its investable capital ready to deploy.
Carman Chan, founder and Principal at Click Ventures (Family Office)
Global trade wars are reshaping VC strategy in Southeast Asia; it is creating both challenges and opportunities. On the liquidity front, slower M&A and IPO activity may delay exits, making fundraising more difficult for VCs.
However, this environment also opens doors for alternative solutions like secondary funds and continuation vehicles, which can provide interim liquidity to LPs and VCs while allowing patient investors to benefit from discounted assets. These structures help mitigate exit bottlenecks and keep capital flowing in uncertain markets.
Another notable shift is the influx of startups relocating to selected countries in SEA, leveraging the region as a neutral base while maintaining access to key resources from the original countries. Founders with experience scaling in more mature markets bring valuable expertise, such as Gen AI applications, e-commerce, fintech, and EVs.
For VCs, this presents an opportunity to back teams with proven execution capabilities. Geopolitical considerations require careful due diligence to avoid overexposure to regulatory risks, but this trend will bring more tenants and knowledge into the region.
Trade wars also accelerate supply chain diversification, with certain SEA countries emerging as preferred manufacturing and logistics hubs. Startups facilitating this transition—whether through logistics optimisation, trade finance, or compliance solutions—are well-positioned for growth. Meanwhile, sectors dependent on disrupted supply chains may face challenges, increasing the appeal of localised alternatives in areas like agriculture.
In summary, VCs must adapt by exploring innovative liquidity solutions, selectively capitalising on cross-border founders and talents, and exploring startups that solve the pain points from uncertainty. While trade wars introduce volatility, SEA’s long-term growth trajectory remains compelling, provided investors navigate geopolitical risks with a balanced and opportunistic approach.
Steve Melhuish, Founder Partner at Wavemaker Impact
The recent “Liberation Day” tariff announcements by the US underscore a period of change and uncertainty for the global economy. Yet, while the US adopts a more protectionist approach in its global affairs, this is an opportunity for both Southeast Asia and the broader Asia Pacific region to step up, not only in strengthening trade relationships with like-minded peers but also in continuing its commitment to innovation, particularly around areas like greentech and AI.
From Wavemaker Impact’s perspective, we continue to see new opportunities revealing themselves across various climate-tech sectors. The proliferation of cost-effective electric two-wheelers within the transportation space and the adoption of solar-powered irrigation pumps by smallholder farmers are but two of many recent examples.
So whilst the markets will be volatile in the short term, the opportunity for entrepreneurs and investors to create and invest in the next wave of climate-tech unicorns in Asia over the coming decade remains exciting.
Jussi Salovaara, Managing Partner and co-founder at Antler
Global trade fragmentation is forcing a strategic reordering of how startups scale, and in Southeast Asia, that shift is creating structural advantages for those who can navigate complexity. VCs should now be doubling down on startups building for ASEAN’s regional market, where trade wars are accelerating intra-regional flows and reducing overdependence on the US or China.
Agreements like RCEP (Regional Comprehensive Economic Partnership) are laying the groundwork for a more unified economic zone, enabling startups to scale across borders with far less friction. Digital payment networks, cross-border trade platforms, and localised compliance tools catalyse new fintech infrastructure plays.
Singapore increasingly asserts itself as a neutral, strategic hub for companies serving both Chinese and Western markets. Startups in manufacturing that go beyond low-cost assembly and into higher-value components are also positioned to win as global supply chains increasingly localise and diversify within the region.
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At the same time, global fragmentation is turning interoperability into a competitive moat. As tech standards diverge and regulatory environments become more complex across blocs like the US, China, and the EU, startups that can enable seamless multi-market compliance, integration, and data localisation are becoming indispensable. This shift strengthens the case for vertical SaaS and API-first infrastructure companies that help businesses operate across regulatory lines without losing speed or flexibility.
VCs can no longer afford to bet purely on product-led growth—we never did. In this new reality, go-to-market adaptability and regulatory fluency are no longer “nice to have “; they are core pillars of defensibility, particularly in fintech, logistics, and digital health. The winners in this new order will be those who build for scale and resilience across fragmented markets.
Vinnie Lauria, Managing Partner at Golden Gate Ventures
Our portfolio has little to no direct exposure to the latest round of US-China tariffs as they don’t rely on China for inbound supply chains or exports to the US. That’s not an accident. We’ve long known the US market is tough for international startups; it is incredibly competitive and has high barriers. That’s why we’ve focused on exporting Silicon Valley business models to emerging markets, not importing solutions back into the US.
While the trade war may not directly impact our portfolio, it does reinforce a growing regional trend. We’re seeing deeper trade and innovation ties across Southeast Asia, Japan, and South Korea, and increasingly into the Gulf. Startups like Coda Payments and Multiplier have already expanded successfully into the MENA region, and we see tremendous opportunity for more founders to follow this route. The future of global scaling isn’t US-centric; it’s multipolar.
As an American living in Asia for over 15 years, my playbook has been consistent: take what works in Silicon Valley, adapt it locally, and scale across Asia and adjacent regions. Startups in Vietnam, Indonesia, or Singapore can now scale into each other’s markets, into Australia, or into the Middle East, without needing to “pass through” the US. That’s a structural shift, and Southeast Asia is becoming a base for regional, not just local, growth.
We’re not seeing immediate disruptions that require operational shifts, but we’re staying close to our founders. Strategic conversations around regional expansion, supply resilience, and cost adaptation are ongoing. These trade tensions remind us how critical it is to build agility and optionality into company strategy early on, especially in a world that’s becoming more fragmented, not less.
Rei Murakami Frenzel, Founding Partner at Kadan Capital
Donald Trump’s tariffs are detrimental to the global economy. Whether it’s the US, Southeast Asia, public equity, or private equity, the impact is broadly negative—and public markets have already priced in that uncertainty.
Venture capital tends to lag behind public markets by about three to six months, but we’re starting to see the effects. Since VC is a higher-risk asset class, LPs are likely to become more cautious with new commitments, making the fundraising environment significantly tougher this year.
Additionally, Trump’s tariffs have disrupted the IPO market, with several companies in the US already postponing their listing plans. This delay heightens concerns around Distributions to Paid-In Capital (DPI) for Southeast Asian VCs, making it even more challenging to raise the next fund.
While VCs may face greater difficulty fundraising, startups in Southeast Asia may not be as directly affected. Many SEA countries – due to their trade surpluses with the US – have been hit with higher tariffs, according to Trump’s logic, which could slow overall economic growth.
However, most VCs-backed startups in the region are not heavily exposed to global trade. They tend to offer software products and services that rely on domestic consumption rather than exports.
That said, even if their business fundamentals remain sound, these startups will still face a tighter capital environment. As a result, VCs in the region will need to stay disciplined—focusing on capital-efficient companies that can weather ongoing market volatility.
Qin En Looi, Partner at Saison Capital
As a VC that invests in India, Southeast Asia, and Latin America, we see trade wars pushing emerging markets to reduce reliance on traditional financial rails dominated by a few global players. This shift opens the door for blockchain-based alternatives—such as stablecoin settlements, decentralised credit scoring, and tokenised trade finance—that are faster, cheaper, and more resilient in politically fragmented environments.
Additionally, fragmented trade flows heighten the need for interoperable fintech solutions across markets. Southeast Asia and Latin America are not singular markets—they are each a patchwork of currencies, regulations, and financial institutions. Trade disruptions make it even more critical for startups to build regionally adaptive infrastructure. We see strategic value in startups that abstract complexity across borders, whether in payments, lending, or compliance.
Furthermore, trade instability increases the cost of capital and slows down macroeconomic growth in the short term. But as an early-stage investor with a long time horizon, Saison Capital sees this as a moment to double down on founders building across cycles. The companies that emerge strongest from periods of economic uncertainty are those that localise deeply, partner wisely and spend conservatively.
Herston Elton Powers, Managing Partner and co-founder of 1982 Ventures
The projected global trade war is creating uncertainty. This crushes public market investor confidence and we expect to see more pain and volatility in the public markets. While we are watching the reactions from public markets and governments on new tariff policies, venture capital is fundamentally a long-term game.
A global trade war does not directly impact our investment strategy, as we invest in early-stage tech, such as fintech, enterprise AI, and software infrastructure. Our sector focus is more resilient compared to consumer or export-led business models.
Fintech and enterprise tech founders should focus on resilient markets and strategically position themselves within shifting capital flows; they can thrive amid uncertainty while driving long-term growth.
Elvin Zhang, Director (Venture Funds and Direct Investments of Financial Services and Energy) at Sinarmas
The trade wars will accelerate the China+1 strategy. It will lead to industrial-tech opportunities, as well as manufacturing execution system tech and construction in the region, creating new industrial hubs in Vietnam and Indonesia. Most investment deals, however, will deviate from traditional VC with more private equity elements (e.g., cash flow-oriented semiconductor joint ventures, etc.).
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The tariff wars also mean deeptech hubs veering back towards the two Bay Areas of China and the US, with unfair geopolitical support compared to SEA’s deep-tech scene, forcing surviving regional startups to move there.
Another impact will be valuation depression across startups as liquidity dries up. Capital flight to safe havens will take place, expedited by multiple SEA startup frauds exposed during this liquidity deleveraging process. Brand name VCs with dry powder pedigree (large per cent of endowment and SWF LPs) can take the chance to pull ahead of the pack.
On the topic of liquidity distribution, expect M&A exits to drastically overpower IPOs, which have demonstrated dismal liquidity sinks for early-stage investors, especially during the last two years.
Bit Santos, Partner, Portfolio Operations at Kickstart Ventures
The escalating trade disputes are major market disruptions in the making. Even if global market movements that originate in the West take some time for their effects to be fully felt here, startups are particularly vulnerable to market events. What makes the current situation different is that it may directly affect commercial pipelines in addition to access to capital.
Startups involved in the production, sale, and distribution of physical goods will be most impacted. For some of our portfolio companies that deal with physical goods, the US market has been an increasing point of focus over the past few years. But like the rest of the world, we’re closely monitoring developments.
As part of our strategy to guide our portfolio companies beyond survivability, we aim to help them navigate the diversification of their supply chains and customer bases to mitigate their dependence on any single market. Getting onto a path to profitability and getting to default-alive once again becomes critical as the tech fog may return to a full winter.
Bikesh Lakhmichand, Founding Partner and CEO of 1337 Ventures
Global trade wars push companies to rethink supply chains and regional dependencies. For VCs in Southeast Asia, this means more opportunities in sectors like manufacturing tech, logistics, and cross-border fintech — especially as the region becomes a key alternative to China.
Chalinda Abeykoon, Managing Partner at nVentures
There will be new opportunities for VCs in domains such as logistics tech, supply chain platforms, cross-border trade platforms, B2B infrastructure, etc., and I’m excited to see how entrepreneurs look to solve problems and take advantage of them. At the end of the day, entrepreneurs/founders are problem solvers, and VCs are enablers. There is no point in wasting time or suffering from analysis paralysis.
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