Seed funding has dropped sharply across the region. Angels and syndicates are still writing cheques, yet they are doing it with tighter terms, smaller tickets, and more follow-on discipline.
In the first nine months of 2025, seed-stage funding in Southeast Asia fell to US$110 million, down 72 percent from US$386 million a year earlier, based on Tracxn’s definition of seed as including angel rounds. Early-stage funding also fell 55 percent year on year. Late-stage funding rose, which tells you where risk appetite went.
Operators should care because angels now sit closer to your runway planning. If you rely on a “normal” seed round to bridge 12 to 18 months, the market may not cooperate. You need to plan for more steps, more investors, and more proof before a priced round.
We examine VC trends in Southeast Asia and what’s driving investment in 2025
Angel investing in Southeast Asia is still going strong in activity, but not in ease. The winners are teams that can show revenue, clear unit economics, and a path to the next round without assuming the next round will be big.
Seed capital shrank, and that changed the job description for angels
The clearest recent signal is not a new mega fund. It is the seed-stage collapse inside regional datasets.
Southeast Asia’s total tech funding stands at US$2.6 billion for 9M 2025, down 7 percent from 9M 2024 and down 58 percent from 9M 2023. Seed-stage funding fell to US$110 million. Early-stage fell to US$688 million. Late-stage rose to US$1.8 billion, up 112 percent year on year.
At the same time, DealStreetAsia counted only 229 equity deals closed in H1 2025, with US$1.85 billion deployed, calling it the weakest level in over six years.
This is the shift that matters. Angels are not just “first money in” anymore. In many sectors, angels now act as the only available bridge from product to real traction, especially when institutional seed investors pause.
Key figures at a glance (most recent available)
| Metric | Period | Value | What it signals |
|---|---|---|---|
| SEA tech funding (equity) | 9M 2025 | US$2.6B | Less capital overall |
| SEA seed stage (includes angel) | 9M 2025 | US$110M | Capital concentrates on scale |
| SEA early stage (Series A, B) | 9M 2025 | US$688M | Fewer “graduations” |
| SEA late stage (Series C+, PE) | 9M 2025 | US$1.8B | Capital concentrates in scale |
| SEA equity deals | H1 2025 | 229 deals | Fewer shots on goal |
| Internet economy private funding | 12 months to Jun 2025 | US$7.7B | Modest rebound, still far below 2021 |
Sources: Tracxn, DealStreetAsia, Google-Temasek-Bain (via Reuters).
Singapore still sets the pace for early-stage capital
Singapore remains the regional fulcrum for early-stage financing, even when startups build across borders.
Enterprise Singapore and PitchBook’s Singapore Venture Funding Landscape report shows Singapore-headquartered companies raised about US$4.0 billion across 369 VC deals in 9M 2024. That compares with US$4.3 billion across 410 deals in 9M 2023. The same report puts Singapore at roughly 58 percent of ASEAN VC deal volume and 68 percent of deal value in 9M 2024.
Public policy also keeps Singapore structurally important. SEEDS Capital, under Enterprise Singapore and EDB’s SG Growth Capital platform, co-invests with private partners, with published caps that reach S$2 million for general tech and up to S$12 million for deep tech under Startup SG Equity rules.
The state is also building more institutional plumbing. EDB notes that Seeds Capital and EDBI were set to merge into SG Growth Capital in 2025, and that nearly S$3 billion has been invested in over 330 startups under Startup SG Equity, including more than S$2.5 billion from the private sector.
The practical takeaway for founders is simple. If your angels sit in Singapore, treat Singapore as your diligence and syndication centre, even if your customers sit in Indonesia, Vietnam, or the Philippines.
Syndicates and co-invest schemes are taking a share
Angels did not disappear, they just organised and centralised where possible. BANSEA, one of the region’s best-known networks, says it has 100+ members and 400+ invested companies. This type of network matters more when single-investor cheques get smaller and founders need 10 to 30 small commitments to close a round.
Tracxn’s latest regional release also shows how reporting itself has evolved. It defines the seed stage as including angel rounds, and it lists named seed and early-stage investors by activity in 9M 2025. That is a sign that the market now relies on repeatable, programmatic early-stage capital, not just one-off bets.
The other big structural difference is policy divergence across Southeast Asia.
Singapore’s dedicated angel tax deduction scheme lapsed after 31 March 2020, and IRAS says it grants no new approvals for any period commencing after that date.
Malaysia took the opposite route with Cradle, under the Ministry of Finance umbrella, positions its Angel Tax Incentive as a way to bridge the early-stage investment gap, with conditions such as a two-year holding period and limits on ownership concentration.
If you are building your fundraising plan, these differences affect where angels sit, how they structure SPVs, and how they think about holding periods.
Most people misunderstand what counts as a seed round
A seed round can mean very different things across datasets and term sheets. Tracxn’s stage definitions explicitly group angel rounds into “seed stage.” That means a reported seed decline can reflect fewer institutional seed cheques, fewer angel cheques, or both. It can also miss capital that never shows up as equity.
Many startups now raise early capital through convertible instruments, side letters, or small undisclosed tranches. Those often do not appear in public datasets, especially if they come from individuals, corporate executives, or cross-border syndicates. You can see this limitation hinted at in mainstream reporting too, as deal counts and disclosed amounts diverge from what founders describe privately.
For operators, treat “seed is down” as a risk flag, not a budgeting input. Build a plan that assumes longer fundraising cycles, more fragmented commitments, and more scrutiny on burn and margins.
What is driving the shift for angel money
First, the regional funding rebound is real, but it concentrates in later rounds. Private funding for Southeast Asia’s internet economy grew 15 percent to US$7.7 billion in the 12 months to June 2025, but remained about 70 percent below 2021’s US$27 billion peak. It also says seed-to-Series B share fell from about 30 percent to about 20 percent over the last 12 months versus the prior period.
Second, AI and infrastructure pull capital away from general seed risk. The same Reuters report says AI-related investments made up 32 percent of private funding raised in H1 2025. It also cites more than 680 AI startups raising more than US$2.3 billion in the year to June, with more than 495 of those startups based in Singapore. That clustering pulls experienced operators into angel roles, but it also pushes valuations and talent costs up in certain pockets.
Third, the region’s “where to build” calculus shifted. Reuters points to data centre capacity in Southeast Asia expected to grow 2.8 times, with Malaysia planning 2,415 MW of new capacity, more than half of the region’s 4,620 MW pipeline. That kind of capex cycle changes where enterprise startups form, and where angels see near-term customer demand.
Fourth, angels respond to fewer institutional seed leads by syndicating. When leads get scarce, angels either organise into groups that can lead, or they wait.
Who benefits when angels step in
B2B software and workflow tools benefit first. They can show revenue faster and sell into Singapore’s regional HQ base. That matches where capital still clusters, and it fits SEEDS’ stated strategic focus areas.
Enterprise infrastructure benefits because it attracts late-stage attention that can anchor the market. In 9M 2025, Tracxn attributes US$857 million to enterprise infrastructure funding and US$951 million to enterprise applications, with both rising versus 9M 2024. Angels back these sectors because they can point to later-round comparables, even when seed is tight.
Regulated fintech and compliance tooling also benefit. They can show a clear “why now” demand tied to regulation and cost pressure. Singapore remains the distribution hub, even when the actual growth sits in Indonesia and the Philippines.
Finally, deep tech teams with credible co-invest pathways win more meetings. In Singapore, the existence of co-invest ratios and published caps changes how angels underwrite follow-on risk.
Who gets squeezed, and why it matters for operators
Consumer growth gets squeezed hardest, especially where the thesis depends on subsidy-led expansion. Recent regional commentary has also questioned consumer-led models after weak public market outcomes, and that filters back into angel behaviour as well.
Long-cycle science and hardware teams without grant leverage also feel pressure. Angels can fund early experiments, but they rarely want to fund years of burn without a co-invest anchor.
Founders raising “old-style” seed rounds also get squeezed. If your budget assumes a single large seed and a fast Series A, the data says you are planning against the market. Seed and early-stage declines mean fewer companies reach a clean Series A story.