A Difficult Quarter for Asia’s Venture Market

Asia’s venture market continues to slow, with four of the region’s six largest markets—China, India, Singapore, and South Korea—reporting lower funding in the first quarter of 2025. Only Israel and Japan saw increases as economic uncertainty, global tensions, and trade concerns weigh heavily on investment.

China’s Funding Collapse Drives Regional Decline

China’s venture market saw one of its worst quarters in years. Total startup funding dropped to $6.5 billion—nearly half of the $12.5 billion raised in Q1 2024 and below the $8.2 billion reported in Q4 last year.

Despite the downturn, China still produced the region’s largest late-stage deals:

• Shenzhen Energy Environmental Protection raised $692 million
• Smart Fabric closed a $460 million Series C
• Zhipu AI secured $247 million in private equity

These deals highlight China’s ongoing strength in certain sectors, but broader challenges remain. Zhipu AI, which may go public as early as October, is on a U.S. export blacklist, complicating access to foreign capital. U.S.–China tensions continue to limit investment opportunities in China’s tech space.

India, Singapore, and South Korea Also Slide

India, the region’s second-largest venture market, experienced a 26% year-over-year decline, raising $2.8 billion in Q1. That’s slightly below the $3 billion raised in Q4 2024.

Still, India recorded two standout deals:

• Pioneer Aluminium Industries raised $244 million
• Blinkit secured $173 million in a corporate round from Zomato

Singapore saw the steepest decline, with funding dropping nearly 80% year-over-year. Startups raised just $400 million in Q1, down from $2 billion a year ago.

South Korea also struggled, with funding falling 38% to $500 million compared to Q1 2024.

Israel and Japan Offer Rare Positive News

Only Israel and Japan posted quarterly growth in their venture markets.

Israel saw a 38% increase, raising $1.1 billion in Q1—up from $800 million in the same period last year. The country also beat its Q4 performance, which stood at $700 million. A major contributor was Quantum Machines’ $170 million Series C, led by PSG Equity.

Japan reported modest growth, with venture funding rising to $600 million from $500 million in Q1 2024. However, that figure is still down from $1.3 billion in Q4, showing lingering volatility.

Outlook: Uncertainty Ahead for Asia’s Venture Market

Asia’s venture market remains under pressure. China’s funding slump continues to influence regional trends, but other major players are also seeing declines. While Israel and Japan provide hope, the overall environment remains uncertain. For the region’s startup ecosystem to rebound, investor confidence will need to recover—and that will depend on broader economic and geopolitical stability.