The tech landscape in Southeast Asia (SEA) has entered a phase of uncertainty, marked by a significant decline in funding and longer investment cycles. Kickstart Ventures, the Philippines’ largest corporate venture capital (CVC), highlights the need for startups to adapt to the evolving environment, which has shifted from a temporary “tech winter” to a prolonged “tech fog.”
“During this tech fog, the startup playbook has changed, and it becomes more valuable for founders to navigate with purpose,” Jecky Pelaez, AVP for Legal and Compliance of Kickstart Ventures, said during the Geeks on A Beach (GOAB) event held under Philippine Startup Week 2024.
The region’s funding challenges persist. DealStreetAsia reported that the region’s Q3 2024 funding volume was $1 billion, far below the pre-pandemic average and a stark drop from $2.1 billion the year prior. CBInsights found that startups now wait up to 35 months for funding rounds, compared to just 25–30 months in 2019.
Pelaez emphasized that startups must prioritize sustainable growth, moving away from aggressive expansion strategies. This means focusing on unit economics, aligning product profitability with business goals, and adjusting expectations for funding rounds, which now take longer to secure.
“Founders should recognize the challenges and stress-test their assumptions while staying grounded in market realities,” he said.
“While the tech fog is a difficult time for the ecosystem, we believe there are many opportunities for growth,” said Minette Navarrete , president of Kickstart Ventures. “Startups need to step back, stay open to feedback, and make tough but necessary decisions.”
The changing playbook calls for leaner teams, agility, and a focus on metrics that ensure business viability, as the region’s tech ecosystem navigates its way through the fog.