While global enterprise capital investment rebounded last yr, the Asian funding market collapsed, reaching a total of just $65.8 billion in 2024 – exactly the same as the market achieved in 2014.
With the exception of seeds and angels, every other funding round was worse last yr as geopolitical events and China’s struggling economy looked as if it would drag the enterprise capital market down, based on Crunchbase data.
The fourth quarter showed little resilience, bouncing back from a slow third quarter when enterprise capital funding for Asian startups totaled $15.3 billion, up 12% from the third quarter but down 33% from the fourth quarter of 2023
Deal flow also declined significantly in the fourth quarter, reaching its lowest level since before the pandemic. In the fourth quarter of last yr, just 1,524 enterprise rounds were accomplished in Asia, down 10% in comparison with the third quarter and 22% in comparison with the same quarter in 2023.
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Decrease from yr to yr
To help put into perspective just how big the nearly $66 billion drop in total enterprise funding was last yr, keep in mind that just two years ago, total enterprise funding was greater than double at almost $129 billion.
In 2021, total funding was $194 billion.
Seed and angel financing grew 5% in comparison with 2023, reaching $7.5 billion. However, each early and late stage/technology funding has been successful.
Total early-stage funding this yr was slightly below $29 billion, down 5% from 2023.
Late-stage and technology financing saw a much larger decline for the yr, also coming in at slightly below $30 billion, down 42% from the nearly $51 billion seen in these rounds in 2023.
Late growth and growth rounds remain low
It is this decline in late-stage rounds and technology that has obscured any considered a 2025 rebound in the Asian enterprise scene.
While late-stage and technology round numbers in the fourth quarter actually increased from the third quarter, that was only as a consequence of how low performance was in the quarter.
Late-stage and technology rounds raised a total of $7.2 billion in the fourth quarter, up 30% from the third quarter but down 47% from the fourth quarter of 2023, when such rounds raised $13.6 billion.
The largest late-stage and technology rounds in Asia during the quarter included:
- Based in Singapore in October International GDSdata center developer and operator, raised $1 billion from institutional private equity investors.
- Based in China in December Avatarelectric vehicle brand, has raised roughly $1.5 billion in Series C funding.
- Also in December, a Chinese semiconductor foundry SJ Semi raised a $700 million enterprise round.
Deal flow was no higher, with only 124 late-stage and technology rounds announced in Q4, a 15% decline from Q3 and a larger decline of 34% from the same quarter in 2024.
Early stage declines
Similar to late-stage and technology rounds, early-stage rounds experienced quarter-over-quarter growth but declined yr over yr.
In the fourth quarter, early-stage rounds totaled $6.4 billion across 556 rounds announced. The value of the dollar increased by a modest 3% in comparison with the third quarter, but decreased by 16% in comparison with the fourth quarter of 2023.
Transaction volume was almost at the same level as last yr’s third quarter, but was down 12% in comparison with the previous fourth quarter.
The angel and the seed do not germinate
While angel and seed funding doesn’t significantly change the overall funding amount, it may possibly be a sign of where the market is heading.
Asia’s enterprise capitalists are likely hoping this is not the case, as angel and seed funding – the only shiny spot in the year-end totals – last quarter returned to previous lows in the second and third quarters of 2023.
Total angel and seed funding was just $1.7 billion in the fourth quarter, down 13% from the prior quarter and down 6% year-over-year.
Deal volume also declined in the first rounds and stood at just 844 rounds. This number represents a 14% decline in comparison with the third quarter and a 25% decline in comparison with the fourth quarter of 2023.
What we learned
The Asian market continues to indicate upward trends, which is probably a good sign for VC funds.
The company’s overall share of the global enterprise market fell to only 21% last yr, before rising to almost 30% in recent years.
Perhaps more worryingly, AI startups appear to be taking off around the world, but not in Asia. The region actually saw enterprise funding for AI startups decline in the fourth quarter to only $1.7 billion, down 28% from the third quarter and 21% from the fourth quarter of 2023.
In fact, the region appears to have little to achieve from the AI craze.
It is clear that tensions in the Middle East, slow economic growth in Japan, and inflationary pressures and a “deflationary spiral” in China – where the government recently stepped in to try to boost civil servants’ wages in an try to reverse this trend – are helping to cripple the enterprise capital market in the region.
This doesn’t even take into account changes in the US that would increase tensions with several countries on the continent.
This yr, the $66 billion enterprise raised by Asian startups may not look bad.
Methodology
The data in this report comes directly from Crunchbase and is based on reported data. The data provided is from January 3, 2025.
Please note that data transfer delays are most noticeable in the earliest stages of a enterprise, with seed funding amounts increasing significantly after quarter/yr end.
Please note that each one financing amounts are in US dollars unless otherwise noted. Crunchbase converts foreign exchange to U.S. dollars at the spot rate in effect on the date financing rounds, acquisitions, IPOs and other financial events are reported. Even if these events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historical spot price.
Glossary of financing terms
Seeds and Angels consist of seed, pre-seed and angel rounds. Crunchbase also includes enterprise rounds of unknown series, equity crowdfunding, and convertible notes with a size of $3 million (in U.S. dollars or a U.S. dollar equivalent) or less.
The early stage consists of Series A and Series B rounds, in addition to other forms of rounds. Crunchbase includes enterprise rounds of unknown series, corporate ventures and other rounds above $3 million and those valued at lower than or equal to $15 million.
The Late Stage consists of Series C, Series D, Series E, and later lettered expedition rounds following the “Series [Letter]“Naming convention. Also included are enterprise rounds of unknown series, corporate ventures and other rounds valued at greater than $15 million. Corporate rounds are only included when a company has raised seed financing as a part of a series enterprise financing round.
A technology development is a private equity round led by a company that has previously raised a “venture” round. (Basically any round from the pre-defined stages.)