SINGAPORE Trends and Developments Contributed by: David He, Benjamin Teo, Kinnari Sahita and Binh Vong, Gunderson Dettmer Singapore LLP
of growth equity financing available in South- East Asia. As companies increasingly priori - tise profitability, capital from small-cap private equity investors and private credit providers has become more accessible to start-ups. The venture arms of large corporates, which have traditionally invested strategically in start-ups to access innovative technologies, market insights, and rights of first offer or refusal for collaborations or partnership opportunities, have also remained active in the market. The relatively lower urgency among corporate VCs to secure financial returns through an exit presents an appealing proposi - tion for founders who are under pressure from VCs to achieve liquidity. Venture builders and start-up labs also serve as important contributors to the venture ecosystem in Singapore. However, traditional VCs assess - ing a venture-built start-up often have concerns about the company’s ability to attract and retain high quality talent. While such start-ups may offer an experienced and highly qualified management team, they also tend to operate at a higher cash burn rate, and without proper incentive structures in place, the key contributors may be inclined to depart for other lucrative opportunities. 2025 and Beyond Despite the headwinds, South-East Asia main - tained its upward trajectory in digital adoption, with internet penetration on track to exceed 80% and internet users comprising nearly two- thirds of the region’s total population, according to the 2024 e-Conomy SEA Report published by Google, Temasek and Bain & Co. Certain trends in 2025, including an expected reduction in interest rates and gradual return of foreign
investors to the region, are expected to provide further tailwinds for South-East Asian start-ups. The accelerated adoption of AI tools, in par - ticular, is expected to greatly aid start-ups in enhancing customer service, optimising costs, and addressing inefficiencies, allowing them to reallocate resources towards development and innovation. Finally, the South-East Asia talent market is showing equally positive signs of catching up with more mature technology markets. In a recent H1 2025 State of the Markets report published by Silicon Valley Bank, South-East Asian nations, led by Singapore, Vietnam, the Philippines and Indonesia, represented four of the eight fastest growing markets for tech talent, as indicated by the number of new developers registered on the GitHub platform from 2023 to 2024. In addition to technical talent, alumni of successfully exited tech companies such as Grab, Gojek, Tokopedia and Sea Group, among others, continue to reinvest their skills and capi - tal into the South-East Asia venture ecosystem, contributing to hundreds of successfully funded new start-ups. The first quarter of 2025 has shown some promising signs of a rebound, but whether the momentum continues throughout the year remains to be seen. Start-ups that have demon - strated resilience through the challenges of 2023 and 2024 will be well positioned to capitalise on opportunities when the market eventually recov - ers. However, founders must continue to priori - tise the execution of a sustainable monetisation and profitability model while pursuing strategic growth.
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