Latest / SEA of Startups / 🎙EP4A: Funding’s Up, Startups Down? Southeast Asia’s Barbell Economy in 2025

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🎙EP4A: Funding’s Up, Startups Down? Southeast Asia’s Barbell Economy in 2025 · SEA of Startups

• 0:00
  SPEAKER_00: Hey guys,
• 0:01
  SPEAKER_00: this is Sea of Startups,
• 0:04
  SPEAKER_00: where the stories are real,
• 0:06
  SPEAKER_00: the insights are earned,
• 0:07
  SPEAKER_00: and the startup game gets serious.
• 0:11
  SPEAKER_00: So we're one month in, and four episodes deep.
• 0:15
  SPEAKER_00: To mark the milestone,
• 0:17
  SPEAKER_00: we're dropping this two-part special,
• 0:19
  SPEAKER_00: a sharp,
• 0:20
  SPEAKER_00: honest look at capital flows,
• 0:23
  SPEAKER_00: structural shifts,
• 0:24
  SPEAKER_00: and hidden risks shaping the region's startup ecosystem.
• 0:29
  SPEAKER_00: In part one, we break down where the smart money's heading.
• 0:34
  SPEAKER_00: From the funding crunch and barbell economy,
• 0:38
  SPEAKER_00: to why early stage founders are finding it harder to raise.
• 0:43
  SPEAKER_00: Let's get into it.
• 0:51
  SPEAKER_00: Welcome to the Sea of Startups.
• 0:53
  SPEAKER_00: I'm Kim.
• 0:55
  SPEAKER_01: And on Kevin,
• 0:56
  SPEAKER_01: this is now episode four,
• 0:59
  and we're talking about where's the money actually moving from
• 1:03
  infrastructure bets
• 1:04
  SPEAKER_01: to policy nudges in Southeast Asia's next tech phase.
• 1:09
  SPEAKER_01: We've got a number of things on the docket today.
• 1:11
  We're talking about the funding snapshot that came out of the
• 1:16
  first half of 2025.
• 1:17
  SPEAKER_01: We've got AI data centers coming up in Jakarta.
• 1:23
  SPEAKER_01: There's some trends across the
• 1:24
  the region as well and then of course we're going to wrap it up
• 1:27
  with some of the
• 1:28
  recent policies and efforts coming out of my home base not home
• 1:34
  country but home
• 1:35
  SPEAKER_01: base which is Malaysia so we've got some exciting stuff to talk about
• 1:40
  SPEAKER_00: Let's dive in.
• 1:41
  SPEAKER_00: First up, let's look at the funding snapshot.
• 1:44
  SPEAKER_00: So Kevin,
• 1:45
  I hear Southeast Asia's venture scene in the first half pulled
• 1:50
  in about $2 billion,
• 1:52
  SPEAKER_00: but it's not exactly a Trumpian headline,
• 1:56
  SPEAKER_00: right?
• 1:57
  SPEAKER_00: I mean, what's going on really?
• 1:59
  SPEAKER_01: Yeah, so there's a bit to unpack out of this 2 billion figure.
• 2:02
  So first half of 2025,
• 2:05
  Southeast Asia tech startups,
• 2:07
  this information came from Traction.
• 2:10
  SPEAKER_01: So just to put the reference out there,
• 2:12
  SPEAKER_01: what it showed was a basically double digit drop,
• 2:15
  SPEAKER_01: 24% drop from the second half of last year.
• 2:19
  SPEAKER_01: So half on half, 24% decrease.
• 2:20
  SPEAKER_01: But
• 2:24
  SPEAKER_01: Comparing it to the first half of last year,
• 2:26
  SPEAKER_01: it's actually a slight uptick,
• 2:28
  SPEAKER_01: but it's not all rosy news.
• 2:31
  It's actually quite the barbell scenario to where on the
• 2:34
  extreme of the late stage
• 2:36
  SPEAKER_01: funding,
• 2:36
  SPEAKER_01: we've seen an increase.
• 2:37
  SPEAKER_01: But the worrying part of it is that early stage has really collapsed.
• 2:44
  SPEAKER_00: Oh, wow.
• 2:45
  SPEAKER_00: I mean, a barbell, huh?
• 2:46
  SPEAKER_00: Like so biffy and it ends and then skinny in the middle.
• 2:49
  SPEAKER_00: Like how does that look?
• 2:51
  SPEAKER_00: How does that work?
• 2:53
  SPEAKER_01: Yeah,
• 2:53
  SPEAKER_01: so basically,
• 2:54
  SPEAKER_01: you've got the early stage startups,
• 2:57
  SPEAKER_01: it's just much less funding is going into it.
• 3:01
  SPEAKER_01: And you see not only less funding, but lower deal count as well.
• 3:06
  SPEAKER_01: And so you're really starting to see a huge retreat across this.
• 3:10
  You know,
• 3:11
  it might be a signal that investors are slamming on the brakes.
• 3:14
  SPEAKER_01: They're not so into the new and risky bets.
• 3:17
  You may end up seeing that maybe it's just a lack of new
• 3:20
  startups coming out.
• 3:21
  SPEAKER_01: You could put your explanations.
• 3:24
  SPEAKER_01: But the big thing in my mind is if you don't have new startups,
• 3:30
  SPEAKER_01: where are tomorrow's late stage companies going to come from?
• 3:36
  SPEAKER_00: Yeah.
• 3:37
  SPEAKER_00: And meanwhile, what's the end of the barbell then?
• 3:41
  SPEAKER_01: Yeah, on the other side of it, you actually did see late stage pickup.
• 3:45
  SPEAKER_01: So you saw an overall increase happening in the late stage.
• 3:49
  SPEAKER_01: Although funny enough, it was fewer actual deals that happened.
• 3:55
  SPEAKER_01: They were just larger in size.
• 3:57
  SPEAKER_01: To put some numbers on this, there was $1.4 billion.
• 4:04
  SPEAKER_01: in deals at the late stage across 10 deals.
• 4:08
  SPEAKER_01: That's about 140 million average per deal.
• 4:11
  You had some sizable ones that were in there like Superbase,
• 4:14
  a couple other numbers.
• 4:16
  SPEAKER_01: But if you compare that to the last two halves,
• 4:19
  SPEAKER_01: so like second half of 2024,
• 4:20
  SPEAKER_01: it was just over half a billion.
• 4:26
  SPEAKER_01: And it was roughly similar in the first half of last year as well.
• 4:30
  SPEAKER_01: But on larger deal counts,
• 4:32
  SPEAKER_01: it was 15 and 14 respectively,
• 4:34
  which signals that it was a much smaller average deal size for
• 4:39
  those two ones.
• 4:41
  SPEAKER_01: And so this could be just the quality rising to the top.
• 4:46
  SPEAKER_01: There's still a lot of cash out there looking for a place to go.
• 4:51
  SPEAKER_01: They are great companies.
• 4:53
  SPEAKER_01: Like I said, you had Superbase end up getting funny, funding, Airwallet.
• 4:57
  SPEAKER_01: You've got some of these guys that are raising big names, big rounds.
• 5:03
  SPEAKER_00: Yeah, and it seems like pretty much like what we said before.
• 5:07
  SPEAKER_00: The funding...
• 5:09
  cycles has been pretty much retracting a lot like um not in
• 5:15
  terms of the activity
• 5:16
  it's not as active as it used to be in 2021 and it's looking at
• 5:20
  big qualities like
• 5:21
  you said investors are in a flight to quality mode and only
• 5:24
  backing safer later
• 5:26
  stage bets i mean didn't we see something similar like in the
• 5:30
  states as well
• 5:31
  SPEAKER_00: recently
• 5:33
  Yeah,
• 5:33
  so I mean,
• 5:34
  the US has gone through like boom-buff cycles a few different
• 5:38
  times.
• 5:38
  SPEAKER_01: It is actually a natural cycle to be going through.
• 5:42
  So it's not that we should start sounding the alarm and saying
• 5:45
  that venture is dead
• 5:46
  SPEAKER_01: or anything like that.
• 5:47
  SPEAKER_01: It's healthy cycles.
• 5:49
  SPEAKER_01: Because in all fairness, I do believe that we had...
• 5:54
  SPEAKER_01: quite a bubble in Southeast Asia.
• 5:57
  SPEAKER_01: When we're looking at the aggregate,
• 5:59
  SPEAKER_01: not every country actually inflated a bubble,
• 6:02
  SPEAKER_01: but across the region,
• 6:03
  SPEAKER_01: there was just too much capital chasing too few deals.
• 6:07
  And what ended up happening is that we had this explosion of
• 6:10
  deals that probably
• 6:11
  SPEAKER_01: shouldn't have gotten funded,
• 6:12
  SPEAKER_01: getting funded.
• 6:13
  We saw valuations increasing above where they probably should
• 6:17
  have been in the first place.
• 6:18
  SPEAKER_01: And now a lot of that is coming through in this correction.
• 6:22
  SPEAKER_01: And because the market's nascent,
• 6:24
  SPEAKER_01: we could probably draw the equivocation to like the dot-com bubble.
• 6:28
  SPEAKER_01: Obviously, the technology is different.
• 6:30
  SPEAKER_01: But in regards of like early growing pains of the ecosystem,
• 6:34
  SPEAKER_01: it's definitely one of the early boom bust.
• 6:37
  SPEAKER_01: But we'll come back,
• 6:38
  SPEAKER_01: I believe,
• 6:38
  SPEAKER_01: because the enabling characteristics of the region are still there.
• 6:42
  SPEAKER_00: And when you say we come back, so it's like what?
• 6:44
  Do you think it's similar to the typical equity cycle whereby
• 6:48
  it's a seven-year
• 6:49
  SPEAKER_00: thing,
• 6:49
  SPEAKER_00: you have this up and down and it happens every seven years?
• 6:52
  SPEAKER_00: Or it's very much dependent,
• 6:53
  SPEAKER_00: it's still very random,
• 6:55
  SPEAKER_00: there's no cycle,
• 6:56
  SPEAKER_00: it's not as systematic compared to the typical equity cycle.
• 7:00
  Do you think that's going to go in that direction or it has its
• 7:04
  own rhythm is what I'm saying?
• 7:07
  SPEAKER_01: I think it has its own rhythm.
• 7:08
  SPEAKER_01: I think a lot of it ends up being globally connected,
• 7:11
  SPEAKER_01: to be honest with you,
• 7:12
  SPEAKER_01: but with a little bit of a lag to the West,
• 7:14
  SPEAKER_01: for example.
• 7:18
  SPEAKER_01: but a longer, a slightly longer time to recover.
• 7:21
  SPEAKER_01: So we,
• 7:22
  SPEAKER_01: we,
• 7:22
  SPEAKER_01: we,
• 7:23
  it takes a while for it to hit us and it takes us a little bit
• 7:25
  longer in order to
• 7:26
  SPEAKER_01: recover.
• 7:27
  That cycle will probably change as the maturity of the
• 7:30
  ecosystem develops.
• 7:31
  SPEAKER_01: That's happened in other ecosystems.
• 7:33
  SPEAKER_01: You can see it in,
• 7:35
  in India and Europe and some other ecosystems that have kind of
• 7:39
  where the,
• 7:40
  SPEAKER_01: the,
• 7:40
  SPEAKER_01: the correlation effect has become a little bit more independent.
• 7:45
  SPEAKER_01: But,
• 7:46
  SPEAKER_01: I do think that the other factor of like,
• 7:49
  SPEAKER_01: as the technology cycles themselves are speeding up,
• 7:52
  SPEAKER_01: it's still to be determined how this will impact the boom bus cycles.
• 7:58
  It would be hard for me to say that there's not a little bit of
• 8:01
  a bubble forming in the AI.
• 8:03
  SPEAKER_01: There's a lot of capital flooding into it.
• 8:05
  SPEAKER_01: We talked about AI in the last episode.
• 8:08
  SPEAKER_01: There's definitely something there.
• 8:09
  SPEAKER_01: Not that the long-term trend of technology,
• 8:12
  SPEAKER_01: AI is not going to end up being positive.
• 8:15
  But you have this natural excessive exuberance that comes in
• 8:19
  when something's new.
• 8:21
  Southeast Asia was new for a lot of folks when a lot of money
• 8:24
  started flooding into it.
• 8:26
  SPEAKER_01: And now it's having to go through those growing pains.
• 8:29
  SPEAKER_01: We'll have to kind of reset, redefine, and it'll start coming back again.
• 8:35
  SPEAKER_00: So then my next question,
• 8:37
  SPEAKER_00: we do think this cycle,
• 8:38
  SPEAKER_00: this rhythmic cycle,
• 8:40
  SPEAKER_00: we need to still find a rhythm.
• 8:41
  SPEAKER_00: It rides on the tech as well, right?
• 8:44
  SPEAKER_00: Like AI.
• 8:45
  SPEAKER_00: Now it's like so much money coming to AI.
• 8:47
  SPEAKER_01: Yeah,
• 8:48
  SPEAKER_01: I mean,
• 8:49
  the cycles impacting the boom bus cycles of VC are going to be
• 8:52
  linked to the new
• 8:52
  SPEAKER_01: technologies.
• 8:53
  SPEAKER_01: It's going to be linked to a few other global factors.
• 8:56
  SPEAKER_01: But without a doubt,
• 8:57
  SPEAKER_01: we can think back to the mobile first bubble,
• 9:01
  SPEAKER_01: the blockchain bubble,
• 9:02
  SPEAKER_01: different instances where something new came out.
• 9:05
  SPEAKER_01: And all of a sudden, everyone was like, this is the future.
• 9:07
  SPEAKER_01: Let's flood everything into it.
• 9:11
  SPEAKER_01: And when everybody's chasing the same direction,
• 9:13
  SPEAKER_01: inevitably,
• 9:13
  you're going to end up having not the most sanest of decisions
• 9:16
  making their way
• 9:17
  SPEAKER_01: 100% of the time.
• 9:20
  Not to take away from some of the companies that come out
• 9:22
  during that time period,
• 9:23
  SPEAKER_01: because let's be honest,
• 9:25
  SPEAKER_01: Amazon came out during the dot-com bubble,
• 9:28
  SPEAKER_01: and now they're one of the largest companies.
• 9:31
  SPEAKER_01: Yeah.
• 9:33
  SPEAKER_00: Yeah, and which brings me to the little guys, right?
• 9:35
  SPEAKER_00: Like early stage startups that are left scrambling.
• 9:38
  SPEAKER_00: And that has implications.
• 9:41
  And fewer seed investments now mean a thinner pipeline of
• 9:45
  Series A and Series B in
• 9:47
  SPEAKER_00: the coming years.
• 9:48
  SPEAKER_00: Could this be setting us up for a longer term innovation gap in C?
• 9:55
  SPEAKER_01: Yeah,
• 9:55
  SPEAKER_01: it's honestly,
• 9:56
  SPEAKER_01: from my standpoint,
• 9:58
  a worrying sign when you see just significantly smaller numbers
• 10:04
  of early stage
• 10:05
  SPEAKER_01: deals.
• 10:06
  So I'll jump back into some of the numbers that came out of
• 10:09
  this report because it
• 10:11
  SPEAKER_01: showed some of the progression over time.
• 10:13
  If you look at the first half of 2024,
• 10:16
  it was basically about 200 seed stage deals.
• 10:21
  SPEAKER_01: First half of 25, 56%.
• 10:26
  SPEAKER_00: Wow, that's a big drop.
• 10:27
  SPEAKER_01: That's a massive drop.
• 10:29
  If you go back to the second half of 22,
• 10:32
  which is kind of a bubble-ish time period,
• 10:36
  245.
• 10:36
  SPEAKER_01: So we're down 80% in number of deal count.
• 10:44
  SPEAKER_01: Not necessarily in the dollar flow,
• 10:46
  SPEAKER_01: but we're talking about deal count,
• 10:48
  SPEAKER_01: the number of startups that we're getting funded.
• 10:52
  SPEAKER_01: And so that's a worrying number.
• 10:54
  SPEAKER_01: Whether we're looking at from the 245 or from the 200 last year,
• 10:59
  SPEAKER_01: we basically wiped out three quarters of the amount of deals.
• 11:04
  SPEAKER_01: So...
• 11:06
  SPEAKER_01: don't have the company-wise numbers in this report at my fingertips.
• 11:13
  SPEAKER_01: But it does pose the question of,
• 11:15
  SPEAKER_01: are we just seeing less quality startups,
• 11:18
  SPEAKER_01: which is an indicator of why so few deals?
• 11:22
  SPEAKER_01: Is it the factor of the VCs just aren't investing?
• 11:28
  Or third possibility,
• 11:30
  because of the new tools that we have to become more cash
• 11:34
  efficient,
• 11:35
  SPEAKER_01: are less startups looking for funding.
• 11:38
  SPEAKER_01: So there's three scenarios.
• 11:40
  I think we're a factor of all three of those that are going on
• 11:43
  and why this number is so low.
• 11:45
  SPEAKER_01: But the implication is, you know, think of it like a sales funnel.
• 11:52
  The top of funnel narrows,
• 11:54
  narrows,
• 11:54
  narrows as it comes down to a final close.
• 11:58
  Same sort of funnel visualization when we're talking about the
• 12:02
  different stages of
• 12:03
  SPEAKER_01: funding,
• 12:04
  SPEAKER_01: which wide funnel at the seed stage,
• 12:06
  SPEAKER_01: a little bit more narrow at Series B,
• 12:09
  SPEAKER_01: a little bit more narrow at Series B,
• 12:11
  SPEAKER_01: and so on until it's acquisition or IPO.
• 12:15
  SPEAKER_01: So if we don't have enough at that top of funnel,
• 12:17
  SPEAKER_01: What's the middle of the funnel going to look like in a year's time?
• 12:21
  Because this is generally a leading indicator of who's going to
• 12:25
  be fundraising later.
• 12:26
  And if we don't have the numbers now,
• 12:29
  are we going to have the numbers later?
• 12:32
  And fewer new companies being nurtured means fewer future
• 12:36
  unicorns or regional champions.
• 12:39
  SPEAKER_00: That is kind of worrying.
• 12:40
  SPEAKER_00: Like you said, massive drop.
• 12:41
  SPEAKER_00: And I can't get over that thick drop.
• 12:44
  SPEAKER_00: Everything seems to be moving.
• 12:46
  SPEAKER_00: And then on the flip side of it, VC seems to be stalled.
• 12:50
  SPEAKER_00: So do you think perhaps I'm just throwing in at the fourth reason,
• 12:53
  like C could be facing a kind of generation gap in startups if
• 12:57
  early stage funding
• 12:58
  SPEAKER_00: remains in a slump?
• 13:00
  And,
• 13:01
  you know,
• 13:01
  speaking of unicorns,
• 13:02
  how many did she meet in the first half?
• 13:05
  SPEAKER_00: Like globally, it was what, 35 new unicorns in that time?
• 13:09
  SPEAKER_01: Yeah,
• 13:10
  that same report said that there were 35 new unicorns during
• 13:13
  that time period and
• 13:14
  SPEAKER_01: Southeast Asia minted one of those.
• 13:20
  I'm quite adamant that the terminology unicorn shouldn't be the
• 13:25
  definition of
• 13:26
  SPEAKER_01: success,
• 13:26
  but as an indicator of are we building sizable companies
• 13:29
  because every report
• 13:31
  SPEAKER_01: always wants to use that terminology.
• 13:34
  SPEAKER_01: We only got one.
• 13:34
  SPEAKER_00: Yeah.
• 13:48
  SPEAKER_01: It's a relatively low percent.
• 13:50
  SPEAKER_01: It's better than zero.
• 13:53
  But certainly,
• 13:54
  you know,
• 13:54
  the lion's share of that is coming out of developed markets.
• 13:58
  SPEAKER_01: I can't remember the number offhand,
• 14:00
  SPEAKER_01: but I think the dominant portion of that actually came out of the U.S.,
• 14:03
  which was probably all these wide coding AI startups that all
• 14:07
  of a sudden became
• 14:09
  SPEAKER_01: hugely massive within,
• 14:12
  SPEAKER_01: you know,
• 14:13
  SPEAKER_01: five days of being started.
• 14:15
  SPEAKER_00: And that one and only,
• 14:17
  SPEAKER_00: that sole unicorn happens to be no surprise,
• 14:20
  SPEAKER_00: Signum Bank,
• 14:21
  SPEAKER_00: a digital assets tech firm based out of Singapore.
• 14:24
  SPEAKER_00: And it seems to be hogging the funding pie, really.
• 14:26
  SPEAKER_00: I mean, oops.
• 14:28
  SPEAKER_00: But yeah, seems like it.
• 14:31
  SPEAKER_01: Yeah,
• 14:31
  so the other thing they made note of was that 92% of all VC
• 14:37
  funding in Southeast
• 14:39
  SPEAKER_01: Asia during the first half of 2025 was in Singapore.
• 14:45
  Now,
• 14:46
  this may sound extreme,
• 14:49
  but I question the validity or the true indication of the data.
• 14:56
  And I say that solely because most times I didn't see the
• 15:00
  footnotes in this report.
• 15:01
  SPEAKER_01: So I'm going to make an assumption here that this is the case.
• 15:06
  SPEAKER_01: Almost all the companies in Southeast Asia,
• 15:08
  SPEAKER_01: as you start raising more meaningful amounts of money,
• 15:11
  you get a holding company in Singapore and you raise via that
• 15:15
  holding company in
• 15:16
  SPEAKER_01: Singapore.
• 15:16
  You may still have your operations sitting in Jakarta or Manila
• 15:22
  or Kuala Lumpur or
• 15:23
  SPEAKER_01: Bangkok or Ho Chi Minh or wherever the case may end up being.
• 15:27
  But you put that Singapore holding company so that you can
• 15:29
  raise more regional capital.
• 15:32
  SPEAKER_01: So when I see that 92%, I'm like, well, why is it not 100?
• 15:36
  SPEAKER_00: Yeah, it's kind of misleading.
• 15:39
  SPEAKER_00: It's just so lopsided.
• 15:40
  And essentially,
• 15:41
  almost all the money went to Singapore-based companies or
• 15:44
  deals.
• 15:45
  SPEAKER_00: And that leaves about 8% for the rest of the regions.
• 15:49
  SPEAKER_00: Peanuts went spread across Indonesia, Vietnam, etc.
• 15:53
  SPEAKER_00: Yeah.
• 15:55
  SPEAKER_01: Yeah, I would take this in a slightly different way personally.
• 16:00
  I wouldn't necessarily say this is a true indication of the
• 16:03
  startup ecosystems
• 16:04
  SPEAKER_01: around the region.
• 16:05
  SPEAKER_01: Because again,
• 16:06
  there's a very good chance that many of that 92% number are
• 16:09
  actually living,
• 16:11
  SPEAKER_01: operating,
• 16:13
  SPEAKER_01: and building out of some other country besides Singapore.
• 16:16
  SPEAKER_01: What I would take this as,
• 16:18
  it's a demonstration of the investor sentiment of the trust
• 16:21
  factor of Singapore.
• 16:24
  Many of the countries around the region still have a long way
• 16:26
  to go to build that
• 16:28
  SPEAKER_01: global credibility,
• 16:30
  SPEAKER_01: regulatory policy consistency,
• 16:33
  because many of the countries have started to try and put out
• 16:36
  new policies.
• 16:37
  But Singapore has had multiple decades of quality,
• 16:41
  consistency,
• 16:42
  predictability and consistency.
• 16:44
  SPEAKER_01: you know, it's a very black and white, everything fits in the box.
• 16:47
  SPEAKER_01: There's very little gray area.
• 16:48
  SPEAKER_01: It's predictable that way.
• 16:50
  So there's a high trust factor in regards to what's going to
• 16:53
  happen with my money,
• 16:55
  SPEAKER_01: the tax regulatory,
• 16:56
  SPEAKER_01: et cetera.
• 16:57
  And it's not a snap of the fingers thing that any of the other
• 17:00
  countries in the region can do.
• 17:02
  But I take that 92% as more of an indication of the disparity
• 17:06
  between that
• 17:07
  SPEAKER_01: perception and why all these companies need to have
• 17:12
  holding companies in Singapore if they're going to truly raise
• 17:15
  instead of a quality
• 17:17
  SPEAKER_01: of the startup ecosystems themselves.
• 17:18
  I take it from a slightly different lens,
• 17:21
  but it is an important factor to think about.
• 17:24
  SPEAKER_00: Yeah, it is.
• 17:24
  SPEAKER_00: I mean, I can't agree more.
• 17:25
  SPEAKER_00: Like 92% is wow.
• 17:27
  SPEAKER_00: If you flip on the other side of it,
• 17:29
  SPEAKER_00: it's like Southeast Asia's venture scene is pretty much in Singapore.
• 17:32
  SPEAKER_00: But to your point,
• 17:33
  SPEAKER_00: to credit the Singaporean government as well,
• 17:36
  SPEAKER_00: they've done a great job in terms of setting the scene right.
• 17:39
  SPEAKER_00: And it's actually worked to their advantage.
• 17:41
  SPEAKER_00: I mean,
• 17:42
  SPEAKER_00: if you put VC aside and you look at it from a pop culture point of view,
• 17:45
  SPEAKER_00: it's a slight tangent here,
• 17:46
  SPEAKER_00: but I have to say this.
• 17:47
  SPEAKER_00: For example, like Taylor Swift,
• 17:50
  SPEAKER_00: They had a contract with Taylor Swift.
• 17:52
  SPEAKER_00: None of the Southeast Asian countries that Taylor Swift could perform in.
• 17:55
  SPEAKER_00: That's massive.
• 17:56
  They literally wiped up everything from the region's tourism
• 18:01
  inflow to Singapore.
• 18:03
  SPEAKER_00: And the same goes to Lady Gaga.
• 18:04
  SPEAKER_00: It's
• 18:05
  SPEAKER_00: It's a very calculated,
• 18:07
  very smart move from the government and it translates into the
• 18:11
  VC scene as well.
• 18:12
  SPEAKER_00: And I'm not surprised, you know, that it's, they are doing a good job.
• 18:18
  I mean,
• 18:18
  coming from Malaysia,
• 18:19
  it's,
• 18:21
  I'm just going to give Singapore its credit's due,
• 18:26
  I think.
• 18:26
  SPEAKER_00: Yeah.
• 18:27
  SPEAKER_01: Yeah, yeah, yeah.
• 18:28
  SPEAKER_01: Due credit deserved.
• 18:29
  SPEAKER_01: I mean, it's not unintentional.
• 18:32
  SPEAKER_01: Yeah.
• 18:33
  SPEAKER_01: I don't think they're out front in saying this is our intended strategy,
• 18:36
  SPEAKER_01: but they do try and lure companies into Singapore,
• 18:39
  SPEAKER_01: whether it's the full operations as they've done,
• 18:42
  SPEAKER_01: you know,
• 18:43
  SPEAKER_01: coming from Malaysia,
• 18:44
  SPEAKER_01: the grab story of like,
• 18:45
  SPEAKER_01: you want our money,
• 18:46
  SPEAKER_01: you should come here.
• 18:47
  SPEAKER_01: There's a number of other stories of many,
• 18:48
  SPEAKER_01: many,
• 18:48
  SPEAKER_01: many other startups that they've done a similar sort of thing with.
• 18:51
  They're investors in some of the corporate secretary entities
• 18:55
  that digitalize it
• 18:56
  SPEAKER_01: and make it easier to put the holding company in Singapore.
• 18:59
  SPEAKER_01: It's well established.
• 19:03
  SPEAKER_01: It's understood.
• 19:03
  SPEAKER_01: And I don't see that wall tearing down anytime soon.
• 19:08
  A lot of the startups that we invest in ourselves,
• 19:10
  they have Singapore registered entities.
• 19:12
  SPEAKER_01: And we tell every company that doesn't have one that if you want to raise
• 19:16
  SPEAKER_01: increasingly larger amounts of money,
• 19:18
  SPEAKER_01: you do need to set up a Singapore holding company.
• 19:22
  SPEAKER_01: It's the fact of the matter.
• 19:25
  SPEAKER_01: It's just the way things are.
• 19:27
  And it takes a long time for any other country to consistently
• 19:33
  implement and remove
• 19:34
  SPEAKER_01: those barriers.
• 19:36
  SPEAKER_01: It's not something that you can put in all of a sudden and change.
• 19:41
  SPEAKER_01: But anyway,
• 19:41
  so there's a number of other factors in the report that were
• 19:44
  pretty interesting as
• 19:45
  SPEAKER_01: well.
• 19:46
  SPEAKER_00: Yeah.
• 19:46
  SPEAKER_00: And, you know, I guess it's also a resilience issue as well.
• 19:50
  SPEAKER_00: And ecosystem heavily relying on a one-half.
• 19:53
  SPEAKER_00: But what about other sectors?
• 19:54
  SPEAKER_00: Are there any insights into where the money went?
• 19:58
  SPEAKER_00: It seems like the sector breakdown is pretty interesting.
• 20:01
  SPEAKER_00: Yeah.
• 20:04
  SPEAKER_01: Yeah, yeah.
• 20:04
  SPEAKER_01: So this fits quite well for us because we're a solely B2B tech investor.
• 20:10
  SPEAKER_01: And I've long talked about the thesis in regards to Southeast Asia,
• 20:14
  but what's proven out is that there's a natural evolution where
• 20:18
  the majority of the
• 20:19
  SPEAKER_01: startup ecosystem will start as consumer.
• 20:21
  SPEAKER_01: But as it matures,
• 20:22
  it'll start flipping to where the dominant market value is
• 20:25
  being created on the
• 20:26
  SPEAKER_01: enterprise or the B2B side of it.
• 20:29
  And what this actually shows is that the majority of the
• 20:32
  investments were going
• 20:33
  SPEAKER_01: into those types of sectors.
• 20:35
  A lot of it is dominated by some of these mega deals that ended
• 20:38
  up happening.
• 20:39
  SPEAKER_01: And as we referenced before, yeah.
• 20:42
  So like enterprise infrastructure,
• 20:44
  Superbase ended up getting a massive,
• 20:46
  massive deal.
• 20:47
  FinTech,
• 20:48
  we already talked about how Signum Bank ended up getting a
• 20:51
  massive,
• 20:52
  massive investment.
• 20:55
  SPEAKER_01: But you also have like enterprise software and applications.
• 20:58
  SPEAKER_01: So there's this switch.
• 21:00
  SPEAKER_01: more towards B2B and fintech.
• 21:03
  A lot of thesis around consumer hasn't played out the same way
• 21:07
  that people have anticipated.
• 21:09
  SPEAKER_01: And also you're starting to see a rise of a new B2B companies.
• 21:13
  So I think it's painting an interesting picture of what's going
• 21:17
  on in the ecosystem
• 21:18
  SPEAKER_01: right now in regards to the maturation.
• 21:21
  SPEAKER_00: And it's also quite conservative,
• 21:22
  SPEAKER_00: like,
• 21:23
  SPEAKER_00: you know,
• 21:24
  SPEAKER_00: investors are doubling down on what's working,
• 21:26
  SPEAKER_00: fintech,
• 21:26
  SPEAKER_00: B2B.
• 21:27
  SPEAKER_00: I just have to throw this in,
• 21:28
  like the conversation with Chris last week also kind of adds
• 21:31
  some volume as to how
• 21:33
  SPEAKER_00: agentic AI and how B2B is going to take flight from there.
• 21:36
  SPEAKER_00: and shelving the moonshot ideas for now.
• 21:39
  SPEAKER_00: And the vibe in the first half of 20 to 5 is,
• 21:42
  SPEAKER_00: it's like,
• 21:42
  SPEAKER_00: show me something proven in revenue and I'll write a big check.
• 21:46
  SPEAKER_00: Again, I'm trying to tie in parallels to seedstrapping.
• 21:49
  SPEAKER_00: So,
• 21:49
  SPEAKER_00: you know,
• 21:51
  SPEAKER_00: if you're early stage or unproven on,
• 21:53
  SPEAKER_00: you know,
• 21:54
  SPEAKER_00: they're pretty much not interested.
• 21:57
  SPEAKER_00: It's a cautious, but it's an almost survivalist mode for VCs right now.
• 22:01
  And they're conserving funds and follow-ons for their winners
• 22:05
  rather than betting on newcomers.
• 22:06
  SPEAKER_00: And the cycle as well is pretty much riding on that too.
• 22:10
  SPEAKER_00: Investments are more contracted.
• 22:11
  SPEAKER_01: Yeah, without a doubt, it's an extremely tough fundraising environment.
• 22:16
  It's a wake-up call for early stage founders and the
• 22:18
  policymakers and the other
• 22:20
  ecosystem builders that are trying to encourage the ecosystem
• 22:23
  to buy something
• 22:23
  SPEAKER_01: different,
• 22:24
  SPEAKER_01: you know.
• 22:25
  SPEAKER_01: In my mind,
• 22:27
  the strategy that was put in place didn't play out the way that
• 22:31
  they thought it was
• 22:31
  SPEAKER_01: going to play out.
• 22:32
  SPEAKER_01: So the results didn't come in.
• 22:33
  So a lot of this conservatism from the funder side is also a
• 22:38
  reversion back away
• 22:40
  SPEAKER_01: from strategies that didn't work for them in the past.
• 22:43
  SPEAKER_01: Most B2B is operating off of
• 22:47
  SPEAKER_01: subscriptions or transaction fees.
• 22:49
  SPEAKER_01: They're based off of usage.
• 22:51
  SPEAKER_01: There's these aspects that have a little bit more predictability.
• 22:56
  SPEAKER_01: A lot of the big companies are now getting these larger size tickets.
• 23:00
  SPEAKER_01: They've worked their way into being more of the
• 23:04
  entrenched operating layers,
• 23:06
  whether they're true infrastructure or mission critical.
• 23:10
  When you stumble upon these opportunities where you can build a
• 23:13
  startup in that
• 23:14
  SPEAKER_01: space,
• 23:14
  SPEAKER_01: you have something that becomes very,
• 23:18
  very viable and it's less prone to the fickle nature of the
• 23:22
  consumer because
• 23:23
  SPEAKER_01: enterprises can't just rip and replace so easily.
• 23:26
  SPEAKER_01: Now,
• 23:27
  SPEAKER_01: maybe in the era of agentic AI,
• 23:29
  SPEAKER_01: which is still coming down the road,
• 23:30
  SPEAKER_01: we'll see what the impact of that is.
• 23:31
  SPEAKER_01: But for the time being,
• 23:34
  There is kind of a reshaping of the understanding and the
• 23:38
  perception of viability
• 23:41
  SPEAKER_01: and taste,
• 23:42
  SPEAKER_01: because in a lot of investor circles,
• 23:45
  you talk about investor taste and those taste buds seem to be
• 23:49
  changing a little bit
• 23:50
  SPEAKER_01: more towards B2B tech,
• 23:52
  SPEAKER_01: at least from some of this data.
• 23:54
  SPEAKER_00: you know, time will tell, you know, it's a tale of two extremes.
• 23:58
  SPEAKER_00: And speaking of extreme,
• 24:00
  SPEAKER_00: let's transition into a second story,
• 24:02
  SPEAKER_00: you know,
• 24:02
  SPEAKER_00: which involves an extremely large investment,
• 24:05
  SPEAKER_00: but a different kind.
• 24:06
  SPEAKER_00: Like, and this one's big, literally.
• 24:12
  SPEAKER_00: And just when it was getting good.
• 24:16
  SPEAKER_00: We're going to have to leave you hanging for now.
• 24:20
  SPEAKER_00: That's wrap on part one.
• 24:22
  SPEAKER_00: And in part two,
• 24:23
  SPEAKER_00: we unpack one of the region's biggest investment plays,
• 24:27
  SPEAKER_00: Jakarta's $2.3 billion AI data center,
• 24:32
  and explore whether Malaysia's bold policy reboot is enough to
• 24:38
  shift the map.
• 24:39
  SPEAKER_00: Trust us, you'll want to hear this one.
• 24:44
  SPEAKER_00: and I'll catch you in the next episode.
• 24:46
  SPEAKER_00: And hey,
• 24:47
  SPEAKER_00: if something here made you think or resonated with you,
• 24:51
  SPEAKER_00: share it with a founder,
• 24:53
  SPEAKER_00: friend,
• 24:53
  SPEAKER_00: operator,
• 24:54
  SPEAKER_00: or an investor who needs to hear it too,
• 24:57
  SPEAKER_00: or could potentially benefit from this conversation.
• 25:01
  Just so we're clear,
• 25:03
  everything we discuss here is based on personal perspectives.
• 25:07
  SPEAKER_00: This isn't financial advice,
• 25:09
  SPEAKER_00: and we're not speaking on behalf of any institution or organization.
• 25:15
  SPEAKER_00: Hit follow so you don't miss out on part two.
• 25:18
  SPEAKER_00: See ya.
• 25:19
  SPEAKER_00: Peace out.