This interview originally appeared in the DealStreetAsia DATA VANTAGE report Mapping SEA & Indonesia’s 2024 Journey released during the Indonesia PE-VC Summit 2025.
Southeast Asian startups sealed a mere 116 equity funding rounds in the final quarter of 2024—the lowest quarterly deal volume seen in over six years.
This weak performance capped a tough year for the region, with total 2024 deal volume slipping 10.3% year-on-year to 633 deals—the lowest in four years, according to data from the report Mapping SEA & Indonesia’s 2024 Journey by DealStreetAsia DATA VANTAGE.
Elsha Eliasa Kwee, Country Director of Indonesia, Genesia Ventures, however, expects deal volume to grow rather than shrink in 2025 led by early-stage investments.
“VCs have raised substantial funds in the past 3-4 years that need to be deployed. Meanwhile, startups founded in the past two years are likely to have built their businesses… aligning well with investor demands. I believe these two factors support the theory that early-stage investment activity will increase,” said Eliasa Kwee.
Edited excerpts from the interview:
Given that venture capital investments in Southeast Asia declined by 10.3% year-on-year in volume and 41.7% in value in 2024, what factors do you think contributed most to this trend? How do you see deal activity evolving in 2025 amid the ongoing asset revaluations?
Investors who focus on Southeast Asia as their core market have become more selective and cautious in recent years. This is reflected in both their approach to valuation—given the uncertain exit environment—and their thorough evaluation of business fundamentals, particularly governance and path to profitability.
As for overseas investors who do not have a local presence and initially viewed Southeast Asia as a potential emerging market to explore, I think they have decided to focus on their core markets.
“Startups founded in the past two years are likely to have built their businesses… aligning well with investor demands.”
VCs have raised substantial funds in the past 3-4 years, which now need to be deployed. Meanwhile, startups founded in the past two years are likely to have built their businesses with discipline and profitability in mind due to market conditions—aligning well with investor demands. I believe these two factors support the theory that early-stage investment activity will increase. There are certainly other factors that can affect deal activity this year, but I expect deal volume to grow rather than shrink further this year.
With early-stage rounds finding steadier ground and late-stage companies facing persistent valuation challenges, do you think this reflects a broader shift in investor risk appetite? How might 2025 alter this balance?
Company valuations are driven by potential exits and their expected values, as these determine investor returns. Given today’s uncertain exit landscape and the decline in public company valuations over recent years, the current depression in valuations makes sense. When we see an improvement in the exit potential and market cap of listed companies, it will likely lift late-stage valuations.
Amid declining funding, massive layoffs, and startup failures, what improvements do you think are critical, specifically for early-stage founders, in strengthening and navigating these headwinds in 2025?
I look for founders who are ambitious and eager to contribute to something bigger than themselves while remaining disciplined about building a strong foundation and maintaining strong beliefs in their mission. These combined qualities make them more likely to stay focused on their purpose, do things within their control to move forward, and remain resilient against market movements and fleeting trends.
“I look for founders who are ambitious and eager to contribute to something bigger than themselves.”
At Genesia Ventures, we believe that Digital Transformation (DX) can drive equity and create opportunities for more people. We invest in companies that leverage technology to drive improvements at scale, preferably those that are magnitudes better than existing solutions.
Fintech dominated funding in 2024, with DeFi startups playing a growing role, accounting for 44% of fintech deal volume but only 24% of deal value. How do you interpret this trend, and what implications does it have for the future trajectory of fintech as an investment vertical?
In 2024, cryptocurrency gained wider acceptance due to improved accessibility (through both direct channels and indirect ones like ETFs) and increased liquidity. This helped boost investor confidence in DeFi, while the broader market—including traditional fintech—faced a downturn.
Traditional fintech will likely continue to dominate investment volume and value in the short term, as DeFi remains nascent and faces several challenges—including limited mass-market accessibility and negative sentiment from hacks and fraud. However, should the US introduce favourable crypto policies that boost liquidity and token market caps, investment activity in the DeFi space could grow substantially.
What’s your take on the likelihood of a rebound in IPO and M&A activity in 2025? Additionally, which sectors do you expect to lead the charge in these exit opportunities, and how should VCs strategically position their portfolios to capitalise on this momentum?
The IDX has indicated a strong pipeline of IPOs for 2025, exceeding 2024’s numbers, though these will primarily come from traditional sectors. Regarding tech IPOs, I believe market sentiment will improve once we see an increase in listed tech companies’ market caps and at least one successful, sizable tech IPO in the coming years. This could catalyse more tech companies to go public.
The IDX has indicated a strong pipeline of IPOs for 2025
In terms of tech M&A, Japanese enterprises have shown a growing interest in acquiring Indonesian companies. However, concerns about valuations and governance—particularly financial governance—persist. These concerns extend beyond Japanese corporations to local corporations as well. Once these issues are addressed, I expect M&A activity in Indonesia to increase significantly.
For now, I think Indonesia still has few tech/tech-enabled companies with the maturity and scale suitable for IPO, and don’t see any particular sector that stands out. For companies aiming to go public in the next few years, I believe they should prioritise these key areas; profitability/clear path to profitability, showing strong growth without sacrificing profitability, raising at reasonable valuations, generating cash flow, and robust corporate governance.
