Southeast Asia’s tech funding downturn has persisted into 2025, with investment focused on Singapore-based companies serving global enterprise clients, leaving consumer tech underfunded, according to a new industry report.
“This approach makes sense given that many investors have been burned over the last five years by consumer tech companies that overspent to acquire customers without the spending power to recover their acquisition costs,” venture capital investor Lightspeed said in its latest report titled “The Southeast Asian Consumer Barbell”.
Total venture funding fell to $3.2 billion in 2025 on a pro-rated basis from $25.1 billion at the 2021 peak, according to Tracxn data cited in the report.
The drop reflects a sharp pullback at both early and late stages. Early-stage deals slid to $0.8 billion so far in 2025 from $4 billion in 2022, while late-stage funding plunged to $2.4 billion from $21.6 billion in 2021.
The shift in investor focus is evident in deal sizes, the report added. In 2021, the top five funding rounds included Sea Ltd at $6 billion, Grab at $4.5 billion, and J&T Express at $2 billion. By 2025, the largest rounds were much smaller, led by Airalo at $220 million and Supabase at $200 million.
The analysis argued that not targeting consumer tech represents a “missed opportunity,” pointing out that while the shift toward enterprise and B2B helps diversify the region’s startup ecosystem, the mass-market consumer remains the bigger long-term prize.
“The shift towards Enterprise and B2B is a welcome development in diversifying the industry in Southeast Asia. However, we think the momentum has moved too far away from where the real opportunity still lies – the Southeast Asian consumer,” the report said.
The report frames consumption in the region as a “barbell,” with opportunity clustered at both the affluent and lower–middle ends of the spectrum.
“For most founders building consumer businesses in Southeast Asia, targeting this top 20% should be the top priority.”
Despite the funding slowdown, Lightspeed remains optimistic.
Southeast Asia is a $4 trillion dollar economy growing at 4–5% per year, with more than 60% of its growth powered by consumption. This means that the region adds $100 billion of new consumption every year, the report said.
“We believe that the future consumer should look different from today, and therefore, a portion of this additional $100 billion must accrue to new companies building for the future consumer,” it added.
For over twenty years Lightspeed has been the first investor and an early backer of some innovative companies in the world. It recently co-led the $5 million pre-Series A funding round in Beyond Odds Technologies, the parent company of skill-based training and higher education platform Emversity.
