Southeast Asia’s venture funding landscape continued its downward spiral in Q4 2024, closing the year at a new historic low, according to DealStreetAsia DATA VANTAGE’s latest report.
The Conference Report titled Mapping SEA & Indonesia’s 2024 Journey was released during the Indonesia PE-VC Summit 2025 in Jakarta today.
Regional startups secured just 116 equity funding rounds in the final quarter—the lowest quarterly deal volume in over six years—and raised a modest $1.2 billion. This weak performance capped a tough year for the region, with total 2024 deal volume slipping 10.3% year-on-year to 633 deals and deal value plunging 41.7% to $4.56 billion.
The report paints a sobering picture of 2024’s funding climate as startups raised only 54.6% of the capital secured in 2020—the first year of the pandemic, and just 19.5% of the record-breaking haul in 2021, the region’s high-water mark for venture funding.
However, as equity funding waned, a notable trend emerged, the surge in debt financing. Startups clinched 16 debt deals in Q4 2024, bringing the annual total to a six-year high of 54 deals, valued at $1.85 billion, which is a 150% year-on-year leap.
The Philippines shines through
Among Southeast Asia’s top six VC markets, the Philippines emerged as the standout performer in 2024, driven by a surge in fintech and logistics investments. The country recorded a 38% increase in deal volume, reaching 44 transactions, while deal value soared 84% year-on-year (YoY) to $428 million.
This impressive growth underscores rising investor confidence in the Philippines’ burgeoning startup ecosystem, akin to Indonesia eight to 10 years prior. In a twist of fortunes, Indonesia experienced the sharpest downturn, with deal volume declining 34% YoY and total deal value plummeting 66% YoY to just $438 million across 85 equity deals. This marks the nation’s weakest performance in over six years.
Beyond the funding slowdown, Indonesian startups face deeper structural challenges, including a shrinking middle class and the high cost of doing business, which continue to strain the broader ecosystem. Adding to these pressures, recent developments have exposed significant governance issues within some of the country’s major tech companies, further complicating the landscape.
Singapore, traditionally the region’s most active venture capital hub, showed resilience despite a 7.4% drop in deal volume. However, total funding value fell 44% YoY, due to valuation pressures and a slowdown in late-stage deals.
Focus on fintech
Fintech continued to lead regional startup funding in 2024, contributing $1.68 billion or 36.8% of total funding value, up from 20.3% in 2023. The revival of decentralised finance (DeFi) projects has driven this growth, showing strong investor confidence in blockchain technology within fintech.
Blockchain’s transformative potential is expanding beyond fintech, with enterprise software and IT startups quickly adopting the technology. In 2024, the software and IT sector recorded 66 deals, a 40.4% year-on-year increase, with 82.8% of these ventures leveraging blockchain as a core component.
Traditionally among the top two sectors in the past, the e-commerce sector has continued to lose momentum following a major investor pullback. After peaking in 2021–22, the sector recorded a 29% drop in deal volume in 2024, with just 44 transactions—compounding the 50.4% decline seen in 2023.
Ranking as the fourth most active business vertical by deal volume in 2024, green tech demonstrated relative resilience despite a modest correction, primarily due to the absence of late-stage funding. Renewable energy led the charge, accounting for 14 deals and raising a total of $143 million.
Investment in data analytics and AI/ML startups gained strong momentum in 2024, with deal volume surging 29.6% to 35 deals, making it the fifth most active sector. Generative AI ventures contributed 12 deals, while traditional data analytics and classical AI companies contributed 13 deals, reflecting growing investor confidence across both emerging and established AI technologies.
Recalibrating expectations
Caution remains a defining sentiment among Southeast Asia-focused investors as they navigate challenges such as an uncertain exit environment, declining company valuations, and persistently high interest rates.
Late-stage startups face particular challenges, with valuations expected to remain under pressure unless profitability and fundamentals improve, said OCBC Venture managing director Darryl Ratulangi.
Indonesia is expected to recover from its first major fundraising downturn, said Patrick Yip, founding partner at Intudo Ventures. He noted, however, that the country is likely to remain off the radar for many global investors, as attention shifts to opportunities in US capital markets driven by Wall Street and Silicon Valley momentum.
Speaking from the perspective of a private equity fund manager, Winston Mandrawa, the head of ASEAN at Affirma Capital noted that while Southeast Asia’s tech shakeup has positioned the region for growth, it has not boosted the track record of the region’s investment industry. Key risks include business model scalability, CXO and board-level talent, and liquidity options for alternative assets.
InnoVen Capital partner Paul Ong noted that ESG-led and climate tech initiatives will continue to attract investor interest, providing opportunities for alternative funding structures like private credit to support high-quality businesses with strong fundamentals, positive cash flows, and tangible assets.
Aavishkaar Capital partner Abhishek Mittal highlighted sustainability as a multi-decadal megatrend reshaping how products and services are manufactured, transported, and consumed. Beyond these sectors, areas such as green manufacturing, sustainable logistics and packaging, and traceability solutions are poised for substantial growth.
The Mapping SEA & Indonesia’s 2024 Journey report has extensive data on:
- Quarterly fundraising trends
- Median and average deal values across funding stages
- Deal volume and value of top sectors
- Fundraising performance of each SE Asian market
- Perspectives from fund managers
The report is available to DealStreetAsia Premium Plus subscribers.
