South Asia is Getting Harder to Ignore
By Craig Dixon, Co-Founder and General Partner, Accelerating Asia Ventures
Every six months we review hundreds of companies for Accelerating Asia's next cohort. This gives us a useful view into what early-stage founders are building, where they are building it and, importantly, how those patterns are changing over time.
For Cohort 14, we reviewed 563 applications. South Asia accounted for 48% of them, led by Bangladesh, India and Pakistan. Southeast Asia accounted for 26%, down from approximately 34% in Cohort 13 six months earlier.
So does this mean South Asia is rising while Southeast Asia is declining?
I don't think it's that simple. Our application pipeline isn't a macroeconomic index. We also actively recruit in different markets, which will naturally affect who applies. And Southeast Asia isn't a single market. Singapore, Vietnam, Malaysia, Indonesia and the Philippines all have different funding environments, investor bases and operating conditions.
But I do believe the change in our pipeline is part of a broader shift that early-stage investors should be paying attention to. Capital and opportunity aren't moving evenly across Asia, and an investment strategy that depends too heavily on one startup hub or one funding market will struggle when those conditions change.
South Asia was already producing the companies
South Asia represented 48% of our Cohort 13 applications and exactly the same share for Cohort 14. Bangladesh accounted for 21% of the latest pool, India 16% and Pakistan 7%.
The companies didn't suddenly appear. South Asia has been a major source of our deal flow for years. What's changing is the capital available around those companies and the number of markets they can realistically target as they grow.
Bangladesh is a good example. Global investors supplied approximately 99% of the country's startup funding in 2025, with Gulf-based investors accounting for roughly one-third of that global capital. The three largest transactions represented approximately 95% of the total and early-stage funding declined, so I wouldn't describe this as a broad funding boom. But the source of that capital is important. Source: Startup Bangladesh and LightCastle Partners, 2025 Year in Review
The connection between India and the UAE is already further developed. The two governments operate an official Startup Bridge covering market entry, incorporation, visas and access to the wider ecosystem. Indian founders bring technical depth and experience building for one of the world's largest and most complicated markets. The Gulf brings capital, customers and a base for further international expansion. Source: India-UAE Startup Bridge
The biggest driver of MENA venture funding over the past five years, however, has been Saudi Arabia. The Kingdom accounted for 45% of the region's venture funding in 2025, up from 32% in 2024, with US$1.72 billion in venture capital deployed. Government-backed programs, a growing domestic investor base and the commercial opportunities created by Vision 2030 mean Saudi Arabia is now both a serious source of capital and a market that more companies are building towards. Source: Saudi Venture Capital and MAGNiTT, 2025 Saudi Arabia Venture Capital Report
We can see this developing within our own portfolio. Markopolo started in Dhaka, was accepted into the HF0 program in Silicon Valley and has raised US$3.5 million to date, including a US$2 million seed round led by Joa Capital in Saudi Arabia. The company now has teams across the United States, Saudi Arabia, Bangladesh and India. Source: Markopolo
Markopolo isn't choosing between South Asia, the Middle East and the US. Bangladesh gave the company its starting point and access to talent, Silicon Valley connected it to another investor and founder network, and Saudi Arabia provided both capital and a large commercial market. Each ecosystem plays a different role in how the company builds, raises and grows.
We are seeing this route become increasingly relevant for founders from Bangladesh and Pakistan as well. The Middle East is no longer only a later-stage expansion plan. For some companies, it's becoming part of their fundraising strategy, customer pipeline and corporate structure much earlier.
This doesn't mean fundraising in South Asia is easy. It isn't. Early-stage capital remains limited in many of these markets. What's changed is that founders have a clearer route into another pool of investors and customers, and that makes more companies viable on a global scale.
Southeast Asia isn't one funding market
What, then, should we make of Southeast Asia falling from approximately 34% to 26% of our applications?
I wouldn't read it as a verdict on the region. Funding began an uneven recovery in the second half of 2025, and investors surveyed by Bain remained positive about long-term funding growth in Singapore, Vietnam and Malaysia. Expectations were more cautious for Indonesia and the Philippines. A single regional headline doesn't capture those differences. Sources: DealStreetAsia and Kickstart Ventures, Google, Temasek and Bain, e-Conomy SEA 2025
Indonesia has its own set of issues. eFishery raised serious questions about financial reporting, governance and diligence. The TaniHub ruling then created a different debate around the legal exposure faced by executives at government-linked venture investors when an investment fails. Two companies don't define an entire market, but cases like these can make investors more cautious when the funding environment is already under pressure. Sources: Bloomberg, Channel News Asia
I still believe Southeast Asia will continue to produce very good companies. We have seen that across our own portfolio for years. But investors need to look at the specific conditions around each company and each country, rather than assuming that what's true in Singapore will also be true in Indonesia, Vietnam or the Philippines.
Where a company is from is no longer a simple question
Another 26% of our Cohort 14 applications came from outside South Asia and Southeast Asia. The United States alone represented 13%, but many of these companies weren't really US businesses in the conventional sense. They were headquartered there while their founders, teams, customers or intended markets remained in Asia.
The reverse is also common. A company may be founded in Pakistan, establish its holding company in Singapore or the US, keep most of its product team in South Asia and sell first into the Gulf. So which country is it from?
The answer depends on why you are asking. The headquarters matter for governance and future fundraising. The operating market matters for customers and execution. The location of the team affects hiring and cost. The expansion market determines which investors and strategic partners may become relevant.
The same applies to capital. A founder may raise equity from Singapore, access working-capital finance locally and find customers or strategic investors in Saudi Arabia. Equity isn't the correct answer to every financing problem either. If a company needs to purchase inventory, finance receivables or deliver a contracted order, selling more equity may be the most expensive way to do it.
This is why a regional network matters. The right market, the right investor and the right form of capital may all be in different places.
Why we invest across both regions
I don't know whether the next venture cycle will favor South Asia or Southeast Asia, and I don't believe any investor can consistently time those shifts.
What we can do is build a strategy that doesn't depend on being right about one market for the entire life of a fund. Fund 2 invests across both South and Southeast Asia, giving us a wider sourcing base and exposure to different economic and funding cycles. It also means the portfolio doesn't depend on one startup hub, one pool of follow-on capital or one country remaining attractive for the next ten years.
Regional diversification doesn't remove risk. Nothing does. But it reduces the fund's dependence on any one version of how Asia's startup markets develop.
South Asia is becoming harder to ignore because the companies were already there and the capital routes around them are becoming more established. Southeast Asia remains core to our strategy, but the opportunities and risks within it are becoming more market-specific.
That is why we invest across both.
Fund 2 is in final close. You can review the fund and co-investment pathways at https://acceleratingasia.com/investors.
Then review the fund and portfolio, or email team@acceleratingasia.com to talk through your questions with us.
Start with the fund deck. Choose your path at acceleratingasia.com/investors and we'll send access.
Ready to invest? Book a call here with a partner.
See the portfolio. Check out acceleratingasia.com/portfolio. Filter by country, sector, or fundraising status. Request an introduction directly to any CEO.
For investors and partners. Choose your path at acceleratingasia.com/investors. Whether you're looking to co-invest in individual startups or invest in the fund, the next step is there.
* Carta Q4 2025 VC Fund Performance. US benchmarks used as Asian fund comparables remain limited.
About Accelerating Asia Ventures
Accelerating Asia Ventures is an independent accelerator and venture capital fund investing in early-stage startups across Southeast and South Asia. Founded by operators, the organisation is committed to supporting founders with capital, credibility, and a long-term community.
For interviews, data requests, or portfolio introductions, contact: team@acceleratingasia.com
