EP-116: Why 2025 is the Year of Promise for Southeast Asian Startup Ecosystem

The startup ecosystem in Southeast Asia is gearing up for some big changes in 2025. And these changes will benefit the ecosystem in the long term—at least that’s the hope.

Last year, equity investments were lower than expected as VC funds became increasingly selective, often unimpressed by startups that prioritized aggressive growth at the expense of financial sustainability. This led to startups shifting their focus towards achieving profitability and diversifying their revenue streams. As startups demonstrate their commitment to financial health, we can expect a more upbeat year in terms of venture funding.

It is also expected that if the US Federal Reserve continues to cut interest rates like last year, limited partners (LPs) will have more liquidity to invest in VC funds, which will ultimately funnel into startups.

On a macro level, the Asian Development Bank has projected a GDP growth of 4.7% for Southeast Asia in 2025, an increase from the anticipated 4.5% expansion in 2024. This translates to a rise in disposable incomes among the growing middle class, resulting in heightened consumer spending.

Startups in the consumer space will be direct beneficiaries as they innovate to meet consumers’ evolving needs. Beyond the consumer sector, robust GDP growth will strengthen the broader Southeast Asian ecosystem, creating opportunities across industries.

This year is also going to be huge for cross-border opportunities. The ASEAN Digital Economy Framework Agreement (DEFA), which was initiated in the latter half of 2023 is expected to show results this year. A comprehensive implementation plan is expected to be finalized in 2025 leading to greater digital co-operation between member countries.

DEFA is expected to give a boost to the digital payments industry in Southeast Asia. With better digital payment integrations and security protocols, the fintech industry is looking forward to a stellar year. This will enhance cross-border e-commerce transactions and improve financial inclusion.

Digital payment companies are expected to clock more than US$1.1 trillion in gross transaction value by this year, according to the latest e-Conomy SEA report. Venture capitalists are particularly excited about the digital lending sector due to its promising growth potential. They are impressed with how fintech startups have integrated AI and LLM into their system to gain deeper insights into customer behavior and enhance lending services.

Another big theme for this year would be a burgeoning IPO market, which was a big disappointment in 2024. The 122 public listings that happened last year saw only US$3 billion in capital raised, the lowest in nine years.

However, things are going to change in 2025. A Deloitte report said that the expected interest rate cuts along with the easing inflation will boost the IPO environment in Southeast Asia in 2025.

Indonesia experienced a significant drop in public listings last year, with only 39 IPOs recorded by November 2024, down from 79 in 2023. It is expected to have a more vibrant IPO market in 2025 as the country regains political stability post-election.

The Monetary Authority of Singapore is assessing its IPO ecosystem to make the public market debut process more accessible to encourage diverse listings.

Considering the ace performance of Malaysia’s IPO market last year, the expectation is that it will continue its momentum in 2025 as well. There were 46 listings by November 2024, its highest since 2006. Out of the total IPO capital raised in Southeast Asia, 50% was from Malaysia alone. The market capitalization reached US$6.6 billion, more than double that of the previous year.

Given these indicators, the outlook for the Southeast Asian startup ecosystem this year surely appears promising.

On that note, let’s dive into this week’s recap.

Buzzing Deals

? Chinese digital healthcare company Weimai has raised US$27.3 million in its Series D round of funding. In addition to existing investors, this investment saw participation from new investors including CNCB Investment, Choice Capital, Yuhang Transformation Industry Investment, Deqing Industry Development Investment, and Nanhu Investment. The 10-year-old company plans to go public in the next two years. Weimai has become China's largest online full-cycle healthcare management platform. The company utilizes its proprietary business model of "managed care organization" (MCO) to serve customers. The company will use the money to fast pace the development of its disease management solution and bolster its AI-related research.

? Indonesia-based bukaPO has closed its late seed funding round led by angel investment network Bali Investment Club and Switzerland-based elea Foundation for Ethics in Globalization. bukaPO did not reveal the amount of money it raised. The company was formed during the pandemic to enable home chefs, mainly women, to serve homemade food to its customers. There are currently more than 4,000 home chefs on its platform. The capital will be used to improve its technology for better user experience, accelerate B2C adoption, and enter new cities within Indonesia.

? Indonesian agritech startup HiFeed has closed its pre-seed round of funding led by Wavemaker Impact, a climate-focused venture fund. The company did not disclose the amount of capital raised. HiFeed works with cattle farmers to provide them with solutions such as access to affordable and nutritious cattle feed. The company wants to revolutionize the cattle industry by enabling farmers to cut emissions and increase profitability. The investment will be used to launch innovative solutions to decarbonize cattle farming and livestock production. In the long term, it also plans to expand its R&D efforts, enhance its technology infrastructure, and reach farmers in key regions.

? Singapore-based wireless charging startup Xnergy has received an undisclosed amount of money from Woori Venture Partners, a South Korean VC fund. Founded in 2017, Xnergy develops wireless charging technology for autonomous robots and automated guided vehicles. Its products are sold in nearly 40 countries across Europe, America, and Asia. It has a strong pipeline of customers and partners including mobile robot companies and system integrators. The company will utilize the capital to accelerate its growth trajectory, improve wireless charging solutions, and increase charging power to 10kW and beyond, catering to the evolving needs of robots and electric vehicles.

? Indonesian parking management company Soul Parking has completed its Series A extension round co-led by AppWorks and AC Ventures along with Taiwan Mobile, USPACE, and Wavemaker Ventures, the early-stage fund of Wavemaker Partners. Soul Parking runs an asset-light parking management service to modernize traditional parking systems. Its proprietary technology offers car owners an efficient and hassle-free digital parking experience. The fresh capital will enable the company to expand into high-density cities in Indonesia, expand its team, cater to a wider range of vehicle types, and explore new opportunities in the EV space.

? Chinese robotics company Fourier has completed its Series E round totalling the capital raised in this round to US$109.1 million. The investment saw participation from Saudi Arabian oil company Aramco’s Prosperity7 along with Chinese firms Peakvest, Guoxin Investment, and Zhangjiang Science & Technology Venture Capital. Founded in 2015, Fourier manufactures humanoid robots to assist in manufacturing, hotel reception, and dealing with toxic substances. The company will utilize the funding to build what it calls the most intuitive embodied agent for AI.

What Stood Out This Week

? Amazon Web Services has launched a new cloud infrastructure AWS Asia Pacific (Thailand) Region to provide cloud capabilities to local businesses and startups. AWS will invest US$5 billion in Thailand in the coming years. The new region will have three Availability Zones to ensure businesses don’t face any delay in response from a network. Cloud computing has gained significant momentum in Thailand, driven by evolving business needs and government initiatives such as Thailand 4.0. Last year, Google announced an investment of US$1 billion in Thailand to develop its cloud and data center infrastructure.

? Singapore’s health ministry has put eight telemedicine providers under investigation for non-compliance issues. Without revealing the names of these companies, Senior Minister of State for Health Janil Puthucheary told the Parliament that these companies are being investigated for clinical care lapses and misleading advertisements. Enforcement actions have been taken in three of these cases, including the revocation of MaNaDr Clinic’s license last month.

? Estonian ride-hailing and food-delivery company Bolt is all set to operate in Vietnam, its third Southeast Asian market after Thailand and Malaysia. Bolt has begun hiring local teams and is onboarding taxi drivers in Ho-Chi-Minh City. Its app now shows Vietnamese as one of the languages. This is an interesting time for Bolt to enter Vietnam as players like GoJek and Uber have exited the market due to fierce competition from Grab. According to market research firm Statista, Vietnam is expected to see significant growth in revenue in the ride-hailing market, with a projected revenue of US$1.88 billion in 2025.

? The Malaysian government has approved Tencent's WeChat and ByteDance's TikTok to operate in the country under a new social media law. The law, which came into effect on January 1, 2025, requires social media platforms and messaging services with more than 8 million users in Malaysia to obtain a license or face legal action. Other social media platforms like X and YouTube didn’t apply for the license. In early 2024, Malaysia reported a sharp increase in harmful social media content such as online gambling, scams, child pornography and grooming, cyberbullying, and content related to race, religion, and royalty.

And that’s the wrap for this edition of #ICYMI, our weekly curated highlights from the Asian tech ecosystem. Subscribe to receive it every Thursday and stay updated on the noteworthy tech developments you might have missed during the week. Like this newsletter? Share it with your friends and colleagues here.