Venture investors said Southeast Asia’s funding downturn is stabilising, but fragile exits, uneven markets, and rising consumer credit risks, especially in Indonesia, are keeping capital cautious.
The comments came from panellists at DealStreetAsia’s Indonesia PE-VC Summit 2026, during a session titled “Conference Report: Frost to Fire: Can Indonesia and SEA reignite the startup boom?”
Joan Yao, a general partner at Kickstart Ventures, said investor behaviour across the region has shifted decisively toward caution following the sharp post-pandemic correction.
“I do see more caution in the market, and that’s across not just funds, but even corporations and even countries,” she said.
While activity has stabilised, Yao said expectations are now more grounded. Barring any external shocks, she added, the market appears to be settling into a more sustainable baseline rather than returning to the excesses of 2021.
Lao and the other panellists were reacting to a joint report by DealStreetAsia and Kickstart Ventures, which finds that startup funding in Southeast Asia stabilised in the second half of 2025 after hitting a cyclical low earlier in the year, with equity dealmaking ticking up modestly.
The report further showed that deal volume edged up modestly in H2 2025, with 233 equity transactions recorded, compared with 228 deals in the first half.
Quarterly data also point to stabilisation, with deal counts holding broadly steady over the past five quarters, reinforcing the view that activity has found a functional floor.
Susli Lie, a partner at Monk’s Hill Ventures, said investors remain reluctant to declare that the cycle has bottomed after several false starts in recent years.
“I’d like to say that it can’t get any worse, but you never know,” she said, noting that many founders have responded by conserving cash and delaying fundraising.
Still, she argued that downturns often produce resilient companies. “If you look at history, some of the best companies came out of a tough time.”
Lie said a durable recovery will depend on whether Southeast Asia can build a more complete capital “value chain” that supports startups beyond early rounds.
“Do we have a mature enough capital value chain to sort of get us all the way to the end?” she asked, adding that restoring investor confidence in Indonesia requires clearer institutional signals.
Helen Wong, managing partner at ACV Capital, said the slowdown reflects both cyclical and structural forces. While interest-rate pressures have weighed on global venture activity, she said the region is also adjusting to the end of the “mobile internet wave” that powered earlier growth.
“There is no other major wave like the mobile internet wave,” Wong said. As a result, her firm has shifted its strategy toward mid-cap growth capital rather than early-stage venture bets.
The Southeast Asia Startup Funding Report showed that Indonesia remained broadly flat through the year, with little semester-on-semester movement in deal volumes.
The data point to a market that has stabilised after a prolonged slowdown but has yet to show signs of renewed momentum.
Eddi Danusaputro of BNI Ventures said investor priorities have moved away from aggressive valuation growth toward profitability and liquidity.
“Now it’s less so about valuation. It’s more about value,” he said, adding that founders’ dream before was to become a unicorn, but now it is to give exits to investors.
Danusaputro said exits remain the weakest link in the region, limiting returns for limited partners and slowing capital recycling. He also said heightened scrutiny of state-backed corporate venture capital has complicated deployment.
Vertex Ventures Southeast Asia & India partner Gary Khoeng said Indonesia remains fundamentally attractive but is lagging peers in deal flow and momentum.
“I do feel that Indonesia has a lot more delays compared to some of the other countries,” he said, citing better flow in Vietnam, Singapore, and even more recently, in Malaysia.
Khoeng added that stronger exit pipelines elsewhere are influencing regional capital allocation. “I’m seeing allocations move closer to 50-50 between India and the rest,” he said.
Early-stage investor Vertex Ventures continues to look for opportunities across sectors ranging from consumer tech to enterprise solutions, fintech, health, and climate tech.
