Investment in Asian startups has reached a multiyear low in the first half of 2025, despite a slight uptick in funding during the second quarter. Startups in the region secured $26.2 billion in seed to growth-stage funding over the first two quarters, with $13.5 billion in Q2 and $12.7 billion in Q1. This represents a roughly one-third decline compared to the same period last year, with deal volume also down across all stages.
China experienced the most significant drop, securing only $5.1 billion in Q2 funding, a 13% decrease from the previous quarter and 34% year over year. The decline is attributed to fewer IPO and M&A exits, increased government intervention, and a slowing economy. Notable funding rounds in China included $207 million for AI chip startup Biren Technology and $181 million for SAIC Mobility.
India, the second-largest venture market in Asia, showed more stability with $3.2 billion in Q2 funding, slightly up from the previous quarter but down year over year. The logistics sector attracted significant investment, with companies like GreenLine and Porter receiving major funding.
Israel saw a rise in funding, reaching $1.9 billion in Q2, the highest in over two years, particularly in cybersecurity and AI sectors. Japan and Singapore also experienced sequential funding growth in Q2.
Late-stage and growth-stage funding for Asian startups increased slightly to $6.4 billion in Q2, though it remains one of the weaker periods recently. Early-stage investment remained stable, while seed dealmaking saw a slight decline with $1.6 billion invested across 827 deals.
With Asia housing about 60% of the global population, there is significant potential for growth in startup investment, particularly in China and India, which appear underfunded relative to their large populations and tech talent. Future quarters will reveal whether investors will capitalize on this potential.
