EP-137: Investors Grow Selective as Southeast Asia’s Startup Scene Matures
VC funding in May 2025 was at a modest US$129 million, down 26% year-over-year.
It’s no secret that equity investment in Southeast Asia has been on a downward trend.
The year 2025 has been something of a roller coaster—January marked a high point, with funding peaking at US$773 million. Since then, the trend has largely been downward, punctuated by the occasional spike.
In May 2025, tech startups across the region raised a total of US$129 million across 16 funding rounds. Of these, nine were early-stage investments, while the remaining seven went to seed-stage companies.
This doesn’t include the US$300 million funding in Airwallex, which was originally founded in Australia but is now headquartered in Singapore.
The top three funded startups in May this year included biotech company Nuevocor (US$45 million), energy storage solutions provider VFlowTech (US$20.5 million), and cybersecurity startup CloudSEK (US$19 million).
The numbers mark a 26% drop from May 2024. The month-over-month decline is even steeper — funding in May was down a striking 70% from April 2025, when startups pulled in US$439 million across nine rounds.
While the funding in May shows a remarkable fall, April saw a heightened flow of VC money in Southeast Asia. Startups in April received 334% more funding compared to March 2025.
The sharp dip in funding this May signals a growing sense of caution among investors, who are becoming increasingly selective about where they put their money. And this investor sentiment is prevalent even in the fintech sector, which is otherwise known for receiving generous funding in Southeast Asia.
The Q1 2025 funding in Southeast Asian fintech companies was US$193 million, a 66% contraction compared to Q1 2024.
The message from the venture capital community has been consistent since last year: prioritize profitability over aggressive, unsustainable growth.
However, investors’ pickiness should not be construed as lack of risk capital.
In May alone, several Asia-focused funds emerged with a mandate to support technology startups across the region. For example, private equity platform TPG NewQuest closed its fifth Asia-focused secondaries fund at US$981 million, while Singapore-based PE firm Quadria Capital secured nearly US$1.1 billion for its third fund to invest in advanced healthcare solutions. Although there is one big caveat: startups must have a clear path to profitability.
With investor sentiment changing for good, founders are prepared for the roller coaster ride ahead as they focus on unit economics and profitability. Many startups have pulled back on lavish spending, discounts, and freebies, while exploring new revenue streams, and offering flexible payment options that suit customers’ preferences.
This shift is also reflected in the performance of publicly listed tech companies in the region, several of which have made significant strides toward profitability.
Take Singapore-based Grab, for instance: it reported a US$10 million profit in Q1 2025, a sharp turnaround from a US$115 million loss in the same quarter last year.
Indonesia’s GoTo Group showed a similar rebound, posting an adjusted EBITDA of US$23.6 million (Rp393 billion) for Q1 2025, marking its return to profitability after a loss during the same period in 2024.
While these examples come from the public markets, they echo a broader sentiment playing out in private markets as well. Investors are increasingly on the lookout for tech companies that can not only scale but also demonstrate a clear path to profitability.
On that note, let’s dive into this week’s recap.
Buzzing Deals
➤ Singapore-based telecom and travel-tech startup Truely has received US$2 million in an additional funding round from Goodwater Capital, Japan-based DG Daiwa Ventures, and UAE-based Disrupt.com, along with existing backer Beenext. With this funding round, the company has raised US$5.5 million and will use the capital to facilitate product development, expand network and offer new enterprise tools. Since it came out of beta phase in 2025, Truely offers unlimited data tailored for frequent travelers seeking seamless and roaming-free connectivity.
➤ Malaysian data analytics startup IOTAJ has secured US$110,000 in a pre-Seed round of funding led by Antler. The company will use the capital to launch Data Co-Pilot, its AI-powered platform to enterprise customers in the next few months. Data Co-Pilot seeks to replace manual data workflows and reduce decision-making time for IOTAJ’s customers through intelligent data science automation. The platform uses AI to act like a data scientist and understands business goals, pulling insights from scattered data, and producing models for things like churn, marketing impact, and sales forecasting.
➤ Tokyo-based food service company Wada FoodTech has raised US$5 million in a pre-A3 funding round co-led by pan-Asia venture capital firm MindWorks ETEC Fund and venture investor Golden Resources Development International. The fresh capital will allow the company to fast-track its growth in key markets such as Japan, the UK, EU, and Australia. It will scale up engineering and manufacturing operations and upgrade its AI-driven backend systems, among others. Wada FoodTech operates an AIoT-enabled ecosystem that powers hot-chain logistics and vending machines that deliver fresh, hot bentos in just nine seconds.
➤ Indian wealth-tech startup Stable Money has raised US$20 million in a Series B round of funding led by Nandan Nilekani’s Fundamentum Partnership along with participation from Aditya Birla Ventures, Z47, RTP Global, and Lightspeed. The company will use the capital to launch new fixed-return products, expand services into smaller towns and cities, and deepen its partnerships with banks and NBFCs. Stable Money is a fintech startup that claims to offer inflation-free predictable returns with instant redemption features.
➤ Australia-headquartered energy technology company Amber has raised US$45 million in a round led by UK-based ETF Partners with participation from Square Peg, Gentrack, Rubio Impact Ventures, and Breakthrough Victoria. The capital will go toward accelerating its growth as it expands its battery and EV automation technology into global markets. Amber offers its customers access to real-time wholesale electricity prices and the technology to automate their home batteries and EVs to charge when cheap renewables are available.
What Stood Out This Week
➤ Vietnam has sought to increase the Vietnam-Oman Investment (VOI) Fund to a total of US$1 billion as it plans to raise additional capital to power its economic and strategic development agenda. Vietnam aims to position this 17-year-old fund as a means to advance its key sectors such as transportation infrastructure, clean water, renewable energy, healthcare, education, and consumer finance. VOI, the joint-venture between the Oman Investment Authority and Vietnam’s State Capital Investment Corporation (SCIC) has disbursed US$384 million since its inception.
➤ Asia-focused growth equity firm Venturi Partners is looking to raise US$125 million as it expects to make the first close of its second fund by the end of June. Venturi Partners II was launched in March this year with a target corpus of US$225-250 million. Through the second fund the firm will back Indian and Southeast Asian consumer-facing growth companies in sectors such as healthcare, retail, education, and FMCG. The fund aims to make the final close by mid-2026.
➤ The Monetary Authority of Singapore (MAS) will review the Code of Corporate Governance (CG Code) with the prevalence of artificial intelligence (AI) and emerging risks associated with it. MAS said the review committee will build on the existing good practices in corporate governance and disclosures made by listed companies. The CGAC will consult with industry players to consider implementation of CG Code along with providing additional guidance and practical examples. It will also consider new CG Code provisions or guidance on corporate culture, board effectiveness, and risk management in emerging areas, such as AI.
➤ Global private equity firm I Squared Capital has bought a controlling stake in Philippine cold chain logistics company Royale Cold Storage (RCS). This is I Squared Capital’s first such investment in the Philippines and is subjected to regulatory approvals including antitrust clearance. RCS operates five mega cold storage facilities with solutions like cold storage, warehouse management, blast freezing, among others. It works with companies in sectors like quick service restaurants, meat processing, food retail, and agriculture.
➤ Hyundai Motor and its South Korean rival Kia have sold their stakes in Indian mobility company Ola Electric. While Hyundai Motor sold its entire 2.47% stake in Ola, Kia sold 0.6% of its stake in Ola, which was less than 1% even before the sale. The combined share sale of both auto majors amounted to US$80 million and subsequently resulted in an 8% fall in Ola Electric’s share on Tuesday. In 2019, the automakers had collectively invested US$300 million in Ola Electric.
And that’s the wrap for this edition of #ICYMI. Every week, we recap the latest developments in the Southeast Asian startup ecosystem, along with a commentary on what catches our eye.