This week, we released our quarterly report on startup fundraising in Southeast Asia. And, as expected, there was no twist in the plot—deal momentum continued to slide, hitting new historic lows and vindicating the view that the region continues to be in a state of prolonged recalibration.
Venture-backed companies in the region secured 113 deals in the March quarter, pulling in $555 million, a sharp 43% year-on-year decline in deal count and a 46% drop in deal value, according to the report Southeast Asia Deal Review: Q1 2025.
Debt financing—the shiny new toy that startups turned to for non-dilutive capital in 2024—lost some of its shine in the March quarter. Whether this is merely a speed breaker or the start of a longer dry spell remains uncertain.
Either way, the trend highlights the fragility of debt appetite in the region’s risk capital ecosystem.
The report points out that stormy macroeconomic skies—especially the looming threat of US tariffs on Southeast Asian exports—are keeping everyone guessing about when the funding slump will bottom out.
Speaking of US tariffs, the week ended with President Donald Trump signaling a potential end to the tit-for-tat levies between Washington and Beijing on each other’s exports, that has spooked markets.
Yet, the overall incoherence of the policy—the announcement on Apr. 2 followed by a 90-day freeze a week later and several exemptions in the days that followed—has left fund managers guessing.
Trade wars and shock waves
As noted in our weekly private equity newsletter, Beyond the Buyout, three of the world’s largest alternative asset managers voiced caution over escalating policy uncertainties in the wake of the new tariff regime.
Blackstone president Jon Gray said: “We believe that the direct first order exposure across our portfolio is limited, although there is potentially material impact to a relatively small group of our companies… We expect that the market volatility and geopolitical concerns will have some effect [on fundraising].”
EQT warned that the current market turbulence could prompt some LPs to cut exposure in their private buckets and affect their decisions to write new cheques, while BlackRock said investment pace may temporarily slow down as the dust is still settling.
In an interview with DealStreetAsia, Vietnamese unicorn VNG said it remains largely unscathed by trade tensions, thanks to its focus on the service sector. It is actively scouting for targeted investment opportunities and remains committed to R&D, albeit with more caution than three months ago, said Kelly Wong, Vice President. “But a higher risk of recession and global trade tensions could potentially impact income, wealth creation, and discretionary spending,” Wong added.
In an analysis this week, we explored the impact of the trade war on the ‘China plus one’ strategy. Investors and entrepreneurs who have thrived from the strategy are caught off guard by America’s proposed tariff hikes on emerging Asian countries, particularly Vietnam. Conversely, India might become the region’s largest beneficiary of the tariffs standoff, thanks to the country’s strong domestic consumer demand and service-heavy export market.
Meanwhile, Kuala Lumpur-based buyout-focused fund-of-funds Gaia Investment Partners, which has invested in about 25 global GPs, is evaluating its portfolio resiliency in the aftermath of the US tariff turmoil. Gaia’s investee funds might only be exposed to some secondary impacts from the tariffs, its CEO and co-founder, Serena Tan, told DealStreetAsia in an interview.
Uncertainty also hangs over Malaysia’s semiconductor industry and broader exports sector. Malaysia—one of the world’s largest semiconductor exporters and increasingly a destination for Chinese firms seeking to navigate US trade restrictions—faces intensified geopolitical crosscurrents and supply chain risks.
Deals and other corporate news
The cost of overlooking corporate governance was once again evident with the steep fall in the share price of India-listed Gensol Engineering this week.
Indian market regulator Sebi’s order, which alleges fund diversion and financial misrepresentation by Gensol’s promoters, is sending ripples far beyond the company’s balance sheet. At the centre of the fallout is EV ride-hailing startup BluSmart, which was co-founded by the same individuals. BluSmart, once seen as a rival to Uber, suspended services on Thursday following Sebi’s allegations. Meanwhile, two independent directors of Gensol resigned this week, following the resignation of Arun Menon, another independent director at Gensol, earlier.
In Indonesia, where the tremors from the scandal at eFishery are still being felt, agritech startup Semaai closed a bridge round from new and existing investors.
Indonesian research startup Populix also announced raising $4.3 million in the first close of its Series B funding round, which was anchored by MSW Ventures.
Chinese artificial intelligence startup Zhipu AI has set the ball rolling on its IPO process. As one of China’s “six AI tigers”, Zhipu AI’s recent move could make it the first large language model firm to go public locally.
Indonesian healthtech startups Klinik Pintar and Lifepack are reportedly struggling with financial and operational challenges, leading to layoffs and delayed salaries, DealStreetAsia reported this week. Klinik Pintar has laid off an estimated 20-30 employees, while Lifepack dismissed around 30 people.
GXS Bank received regulatory approval to acquire Validus Capital, the Singapore arm of Validus Investment Holdings, marking the first acquisition of a local fintech by a city-state digital bank. Validus CEO and co-founder Nikhilesh Goel said digital banks will soon face a critical decision point: either build their lending business brick by brick or buy out fintech lenders like Validus. But while buying out seems to be the quick option in the race towards profit, Validus CEO believes their latest deal with GXS Bank will not spark a wave of similar deals just yet.
Vietnam’s largest coffee chain, Highlands Coffee, is reviving listing plans amid surging demand, with the Vietnam stock exchange being the first choice, founder and CEO David Thai said. “Our success is because of our Vietnamese customers, of our Vietnamese employees… the story is the Vietnam story,” he said.
Highlands Coffee’s renewed IPO plan comes on the back of Indonesia-based Fore Coffee’s successful listing this week. The company had raised 353.44 billion rupiah (about $21 million) in fresh funds through the offering.
LP-GP updates
From the LP-GP quarters, we reported this week on the PE investment and PE fundraising trends in India. LPs seem to be betting big on India’s long-term growth story despite the global economic uncertainty. According to data available with research firm Venture Intelligence, 20 PE-VC firms amassed $2.35 billion between January and March this year—a 41.5% jump in value from the same period in 2024.
Meanwhile, private equity investments in India so far this year have already surpassed levels recorded in the first four months of 2024. PE investors have pumped $8.56 billion into the country between Jan.1 and April 15 this year, compared with $8.33 billion in the first four months of 2024.
In this week’s edition of The LP View, we spoke to Srini Nagarajan, Managing Director and Head of Asia at British International Investment (BII). The UK development finance institution is looking to adopt a more balanced mix of debt and equity in its portfolio, which is currently highly skewed with a 60-65% allocation to equity.
Temasek-backed private equity impact fund manager ABC Impact has raised more than $600 million for its second vehicle. Fund II, which is double the size of the firm’s inaugural fund, has garnered commitments from ADB, a US family office, as well as Temasek, Temasek Trust, SeaTown Holdings, Mapletree Investments, and ultra high net worth individuals.
Several Indonesian conglomerates are understood to be backing a new private equity fund, Sriwijaya Capital, with a total commitment of over $300 million, DealStreetAsia reported this week. The Sinar Mas Group has expressed strong interest in the fund.
Private equity giant EQT has reaped more than $10 billion for its latest flagship fund dedicated to investments in Asia, drawing nearer to the first close expected next week. BPEA Private Equity Fund IX was launched in August 2024 with a target of $12.5 billion and hard cap of $14.5 billion.
Harbour Industrial Capital (HIC), a Hong Kong-based crypto venture capital investment firm focusing on early-stage firms that build projects on Polkadot, is in the market looking to raise $100 million for its second fund.
Wall Street giant Blackstone has gathered over $4.4 billion in the initial close of its third corporate private equity fund for the Asia Pacific region.
That’s all for this week — with markets on the tenterhooks over the trade war, the only certainty is more uncertainty. But we’ll surely be back next week. Happy Easter!
