Once awash with venture capital, Asia’s start-up ecosystem is now weathering a deep freeze as investors reassess their risk exposure amid global economic uncertainty and China’s growth slowdown.
“What winter? It’s the constant weather here,” said Bikesh Lakhmichand, founding partner of 1337 Ventures, a firm specialising in Malaysian and Southeast Asian start-ups. “Fundraising is hard because funds are non-existent.”
Venture capital funding in Asia totalled just US$51.2 billion in the first nine months of this year, according to accounting firm KPMG. Data from business analytics firm Crunchbase reveals a broader trend: funding hit a decade low of US$65.8 billion last year, a far cry from the record US$194 billion raised in 2021.
Malaysia’s government, aiming to revitalise the sector with its “KL20” start-up road map launched last year, has seen only limited success. Official figures show 6.7 billion ringgit (US$1.6 billion) flowed into start-ups in 2024. In the first half of this year, investments totalled just US$50.6 million across 32 deals, according to the Securities Commission Malaysia.
Bikesh said Malaysia had long struggled to convince global investors of its potential as a launch pad for growing early-stage businesses into regional leaders.