Southeast Asia Startup Funding: Top 5 Deals Take 75% in H1 2026

A record-looking number with a narrow base

On the surface, Southeast Asia's startup market had a strong first half of 2026. Startups in the region raised US$7.25 billion in equity funding, almost triple the US$1.86 billion raised in the same period a year earlier, according to the H1 2026 Southeast Asia Startup Funding Report from Kickstart Ventures and DealStreetAsia. 1 The detail underneath that total tells a different story. The five largest rounds accounted for 75.5% of all capital raised. That left about US$800 million to be split among every other deal in the region. 1

The headline growth therefore says more about a few very large cheques than about the health of the wider ecosystem. Most founders raising money in the first half did not see conditions get easier. Many of them, especially at the early stage, found a market that was getting smaller.

Fewer deals, especially at the start

Total deal count fell 5% year on year to its lowest level since 2018. Early-stage transactions drove most of that drop, falling 11% to 195 deals. 1 The report's authors warned that this shrinking group of early-stage companies could limit the number of companies able to scale up over the next several years. 1 Today's seed and Series A rounds become tomorrow's growth rounds, so a smaller base now means fewer candidates for large raises later.

Geography is just as concentrated. Singapore-headquartered companies closed 145 of the region's 217 equity deals and raised US$6.7 billion, or about 92% of all funding. 1 The report noted that many of these companies use Singapore as a financing base for international expansion rather than spending the money mainly at home. 1 As a result, the regional figure says relatively little about capital reaching founders in Indonesia, Vietnam, the Philippines or Thailand.

Where the money went: compute and video AI

The money followed a global trend toward AI models, compute infrastructure and semiconductors. 1 Separate tracking data shows how few transactions produced the totals. Tracxn figures reported by TNGlobal put regional tech funding at US$13.5 billion over the first nine months of the year. Three mega-rounds made up US$7.3 billion of that. 3 They were Singapore data-centre operator DayOne's US$2.5 billion Series C in June, a separate US$2 billion DayOne raise in January, and video-generation company Kling AI's US$2.8 billion Series D in July. 3 Late-stage funding, covering Series C and beyond, private equity and pre-IPO rounds, came to US$10.2 billion of the nine-month total. 3

The two datasets use different providers and different time windows, so their figures should not be directly combined. They do agree on the pattern: a small number of infrastructure and AI deals is absorbing most of the capital. Smaller rounds, such as OneByZero's US$20 million Series A, are being raised in a market where data centres and video-AI megadeals take most of investors' attention, while companies applying AI inside enterprises get less. 3

The upstream problem: fund managers are struggling too

The squeeze on smaller deals connects to a longer-running weakness in how venture funds themselves raise money. In the first half of 2025, Southeast Asian VC managers had their weakest fundraising period in more than seven years, according to DealStreetAsia DATA VANTAGE. 2 Only eight funds reported a first, interim or final close, down from 17 in the previous half and 14 a year earlier. Together those funds raised just US$384 million, compared with US$1.14 billion and US$1.51 billion in the earlier periods. 2 The report linked the decline to global capital moving into safer, more liquid assets. 2

That data covers an earlier period than the 2026 startup figures, so it cannot fully explain this year's results. It still points to a plausible link. Early-stage startups depend mostly on regional VC funds. If those funds raise less, they have less to invest, which fits with the 11% fall in early-stage deals. Mega-rounds like DayOne's and Kling AI's tend to draw on a different and more global pool of investors, including growth equity and strategic backers. That pool is focused on AI infrastructure and is less affected by regional fund managers' difficulties.

What to make of it

The most reasonable interpretation is that Southeast Asia does not have one funding market at the moment. It has two. One is a global, AI-driven market for capital-intensive infrastructure. It operates mostly through Singapore and can produce multi-billion-dollar rounds. The other is the traditional regional startup economy, where deal counts are at multi-year lows and the funds that support it have had trouble raising money.

The near-tripling of total funding is real, but it does not show a broad recovery. Over the coming years, the key measure is whether the early-stage pipeline stabilises. If it does not, the region may end up with large data centres and a few AI giants but relatively few younger companies ready to grow into the next set of later-stage rounds.