Preqin: in the first five months of 2023, VC funding for Southeast Asian startups hit $4B, down 65% compared to H1 2022, as Grab and GoTo continue to slow down
Tsubasa Suruga / Nikkei Asia : Tweets: @tito and @nikkeiasia Tweets: Tito Costa / @tito : Reality check: even at the top of a generational bubble, not enough returns were generated even by the most successful companies in the region https://asia.nikkei.com/... @nikkeiasia : Funding for Southeast Asian startups is worsening. Global interest rate hikes and the slowing business of listed tech giants like Singapore's Grab and Indonesia's GoTo are weighing on the valuations of young companies and investor sentiment. https://asia.nikkei.com/... [image]
Context & Ripple Effects
Southeast Asia's funding arc was still climbing recently: startups raised $8.2B in 2020, with Indonesia alone drawing 70% of the capital, and 2021 marked the generational peak that investors like Tito Costa now argue never produced adequate returns even at its top. The Preqin numbers mark the turn: $4B in the first five months of 2023, a 65% drop against H1 2022.
What makes this more than a rate-cycle dip is the anchor-tenant problem — Grab and GoTo, the listed champions meant to validate the whole regional thesis, keep slowing and dragging young-company valuations and investor sentiment down with them. The slide continued after this story too: full-year 2024 funding fell a further 42% to $4.56B.
First-order effects
- Founders across the region face repriced valuations and thinner term sheets right now, while Grab and GoTo's deceleration removes the public-market proof points VCs used underwrite new checks.
Second-order effects
- Indonesia, which captured 70% of the region's capital at the last cycle's base, is exposed most when sentiment turns — the pullback there proved durable, with Indonesian VC funding collapsing to just $80M in H1 2025.
Third-order effects
- If the pattern holds, the region's 'Silicon Valley of Asia' framing gives way to a smaller, returns-disciplined market — Bloomberg's read on Singapore's stumbled tech hopes (Grab, Sea, Razer) suggests VCs were premature in anointing it, and the 65% drawdown forces a structural reset rather than a pause.
The trend: Southeast Asian venture funding is in a multi-year contraction driven by global rate hikes and the weak performance of its own listed champions, resetting the market far below its 2021 peak.