The Philippines is a standout performer amidst a Southeast Asia startup market reset in the first half of 2025, amid a sharp 20.7 percent regional decline in startup equity investment, based on the SEA Startup Funding Report H1 2025.
The report by DealStreet in partnership with the Philippines’ largest corporate venture capital firm Kickstart Ventures launched Wednesday, September 17, showed that SEA equity investment fell 20.7 percent year-on-year to US$1.85 billion across 229 transactions, the lowest level in both deal volume and value in six years.
However, encouraging signals can be seen across several markets. In the Philippines, startups collectively raised US$86.4 million, edging past Indonesia, which is down to US$78.5 million, for the first time. Regionally, Andi Haswidi, Head of Data Research at DealStreetAsia, noted that the second quarter of 2025 saw capital deployed more than double compared with the first quarter (US$1.28 billion versus US$0.58 billion) suggesting that while deal volumes remain muted, investors are willing to back stronger stories with larger checks.
“The numbers reflect a cautious environment shaped by macroeconomic headwinds and heightened scrutiny of governance standards. Against this backdrop, the Philippines is well-positioned to move from the sidelines to center stage by leveraging its bright spots and strengthening investor confidence,” Joan Yao, Kickstart Ventures General Partner, said.
From margins to the spotlight
The Philippines shows undeniable demand as a market, with more than 95 million digital consumers and a rapidly growing middle class. While the fintech sector dominates as neobank Salmon raised the country’s largest equity deal within the time period at $28 million, the diversification of sectors where health, food and beverage, and retail tech are also attracting capital shows that investors are broadening bets.
“Late-stage deals remain scarce in the Philippines, as elsewhere in the region – an opportunity in Kickstart’s view. Investors are favoring early momentum and founder grit, making their role even more critical in backing strong teams early and helping them scale into regional players,” Yao said.
Glimmers through the tech fog
Despite this more selective environment, the region welcomed new unicorns. Malaysia’s Ashita Group raised US$155 million at a unicorn valuation, Singapore’s Thunes secured US$150 million at a US$1.42 billion valuation, and digital asset bank Sygnum crossed the US$1 billion mark. Based on the report’s tracking, 58 Southeast Asian startups have now achieved unicorn status.
Sectoral trends reflected the selective deployment of capital with fintech maintaining its lead even as both volume and value fell to their weakest levels in more than six years. Health-tech recorded a strong rebound, while green-tech registered 20 transactions despite a decline in overall value.
Despite a weak half-year overall, sustainability-linked sectors stood out, led by climate startups in renewable energy, waste management, and low-carbon mobility. Yao noted that investors continue to back these areas for their measurable and resilient climate and health impact, even as valuations soften.
Overall, Haswidi underscored that the findings reflect a confluence of structural headwinds. “The impact has been evident across all stages, from compressed seed valuations to prolonged timelines for growth- and late-stage rounds, underscoring how pervasive the reset in risk appetite has become,” Haswidi said.
