Investment Highlights for the year 2025: SEA’s “New Pipes” Era, MENA’s Debt Boom, and the Checks Powering Both

In 2025, startup capital across Southeast Asia (SEA) and the Middle East and North Africa (MENA) did not so much “come roaring back” as get smarter, sharper, and more conditional. The spray-and-pray era kept fading in the rearview mirror. In its place: fewer deals, more scrutiny, and a clear investor preference for infrastructure, distribution, and durable unit economics, whether that infrastructure looks like payment rails, credit facilities, power systems for AI data centers, or the less glamorous layers of enterprise workflows.

The numbers tell the mood. In SEA, Tracxn tracked US$2.6B raised in the first nine months of 2025, down versus prior years, with late-stage funding doing the heavy lifting while seed and early-stage shrank.
In parallel, DealStreetAsia’s H1 view of equity funding shows a market still moving, but moving cautiously, with 229 equity deals and US$1.85B deployed in the first half, with late-stage gaining share and early-stage feeling the chill.

In MENA, the tone was different: deal activity stayed busy, with US$2.1B in H1 2025 across 334 deals, and a striking reality underneath: debt was a major driver of the topline.

The 2025 playbook, in four patterns

1. Structured capital went mainstream. Debt is not a Plan B anymore, it is often the strategy, especially for fintech and asset-heavy platforms in both regions.

2. AI investment shifted from demos to dependency. The biggest checks increasingly flowed to the picks-and-shovels layers, compute, data centers, power infrastructure, and workflow tooling that enterprises cannot easily rip out.

3. Singapore and Saudi Arabia acted like gravity wells. Singapore concentrated a large share of SEA’s funding, while Saudi captured a major portion of MENA’s deployed capital in H1.

4. Strategics and sovereign-adjacent capital shaped the pipeline. In SEA, sovereign-linked and corporate capital showed up around infrastructure bets; in MENA, state-backed momentum and ecosystem events helped keep funding velocity high.

Southeast Asia: Where “infrastructure” stopped being a buzzword and started being the product

If there is one sentence that captures SEA in 2025, it is this: capital followed businesses that look like systems, not stories. Tracxn’s 9M 2025 snapshot shows late-stage funding rising while seed and early-stage dropped sharply, signaling that investors preferred scale, defensibility, and predictable execution over experimentation.
DealStreetAsia’s H1 read reinforces the same idea from another angle: fewer deals, higher bars, and a more disciplined market than the region was used to during the boom years.

SEA investment highlights

• Digital Edge: Raised over US$1.6B (US$640M equity plus US$1B debt) to expand its data center platform across Asia. It signals that AI growth in SEA is increasingly constrained by physical capacity, not just software talent. Data center buildouts are becoming strategic infrastructure.

• Amperesand: Closed an US$80M Series A co-led by Temasek and Walden Catalyst to scale power infrastructure for AI data centers. The bet is that power delivery and efficiency will decide who can scale compute in the region. Sovereign-linked backing reinforces that AI infrastructure is being built at the ground level.

• Thunes: Raised US$150M Series D (April 28, 2025) to scale cross-border payment rails. The round underlines that payments infrastructure remains a core battleground because the network that routes money can monetize compliance, settlement, and volume. Demand is rising for global payout coverage without fragmented integrations.

• Salmon: Completed an US$88M financing package (US$60M Nordic bond drawdown plus US$28M equity) to support expansion in the Philippines and wider SEA. It reflects a 2025 financing pattern where consumer fintech uses blended capital to scale without heavy dilution. Hybrid structures are becoming standard for regulated growth.

• Atome Financial: Secured an US$80M private credit facility backed by BlackRock-managed private credit and InnoVen Capital to fund regional expansion. It shows private credit is becoming a primary growth tool for fintech, not just a fallback. Profitability and credit access are now a competitive moat when equity is expensive.

• Carro: Raised US$60M led by Japan’s Cool Japan Fund (Sept 17, 2025) to support expansion tied to promoting Japanese vehicles in Asia-Pacific. It highlights strategic capital favoring platforms with real-world distribution and financing capability. Marketplaces with embedded finance can still attract funding in a tighter cycle.

• Transcelestial: Added US$9.7M, bringing total funding to US$34.7M (Nov 2025), to expand laser-based connectivity deployments. The investment supports alternative infrastructure for mission-critical communications where fiber is slow or impractical. Deep tech funding is still available when deployment pathways and end-users are clear.

• Bluente: Raised US$1.5M Seed Plus (Aug 2025) for AI document translation that preserves formatting. The product targets regulated and high-stakes workflows where accuracy and structure matter more than novelty. It reflects investor demand for AI that solves specific enterprise bottlenecks with measurable ROI.

• Grab: Made a strategic investment in China’s autonomous driving startup Momenta (Dec 18, 2025) alongside a partnership to expand autonomous services in Southeast Asia. It signals SEA platforms are funding frontier tech tied directly to operational leverage. Strategic investing is increasingly about cost curves and execution, not optionality.

• MENA: Funding momentum stayed strong, with fintech and debt-led growth as key themes. Investors leaned into structured financing and infrastructure-oriented plays. The region continues to pair high deal activity with large-scale capital formation.

MENA: Fintech depth, debt momentum, and sovereign-scale ambition

MENA’s 2025 story had more visible velocity. Wamda tracked US$2.1B invested in H1 2025 across 334 deals, noting that debt financing was a key contributor to the headline growth.
Fintech remained a dominant theme, both in where capital went and in the region’s broader push to harden digital infrastructure, regulation, and cross-border commerce.

MENA investment highlights

• erad (Saudi Arabia fintech), secured US$33M in debt financing. The round matters as much for the who as the what: Arab News reported this as Stride Ventures’ first investment in Saudi Arabia, framed around scaling Shariah-compliant, data-driven financing for SMEs. This is debt as growth fuel, capital designed to expand underwriting capacity without forcing heavy equity dilution. In a region where SME liquidity is a national economic priority, that is a financing structure aligned with policy reality.

• Presight plus Shorooq Partners, launched a US$100M global AI innovation fund. Arab News described the fund as pairing capital with access to GPU infrastructure, secure data environments, and distribution channels, exactly the kind of accelerant capital that AI startups need when compute and go-to-market are bottlenecks. It is also a signal that Abu Dhabi wants to be more than a buyer of AI, it wants to be an enabling platform for AI companies that need scale resources. In 2025, this kind of fund structure is how ecosystems compete: not just with checks, but with infrastructure.

• PayPal, announced plans to invest US$100M across the Middle East and Africa. The significance is not only the number, it is the implication that global payment giants see MEA as a region where digital commerce infrastructure is still being built and where partnerships and acquisitions can shape the market. Arab News reported the plan spanning minority investments, acquisitions, venture funding, and technology deployment, tied to PayPal’s regional hub in the UAE. For MENA startups, that is a powerful tailwind: distribution and credibility can arrive alongside capital.

• Brookfield plus Qatar’s national AI company Qai, launched a US$20B AI infrastructure joint venture (announced Dec 9, 2025). This is not a startup round, but it is undeniably an investment highlight because it shows how the Gulf is moving into sovereign-scale compute buildouts. Reuters framed the joint venture as part of Qatar’s effort to become a regional AI hub by expanding access to high-performance computing. The subtext is clear: in MENA, AI competitiveness is increasingly being treated like energy infrastructure, big-ticket, strategic, and state-enabled.

• ANAVA Fund of Funds (Tunisia) to Rasmal Innovation Fund I (Qatar-supported), committed US$4M, targeting a US$100M fund. Arab News positioned this as a cross-ecosystem bridge designed to widen venture access for Tunisian startups and tighten GCC to North Africa ties. The fund’s stated focus spans fintech, B2B SaaS, healthtech, and logistics, sectors that map neatly to MENA’s infrastructure-first thesis. In a year when capital allocation increasingly rewards networks and pipelines, these fund-of-funds moves are part of the region’s connective tissue.

Who’s Writing the Checks

In 2025, the investor stack mattered almost as much as the startups. The loudest signal across SEA and MENA was not more money, but different money, more private credit, more strategic capital, and more sovereign-adjacent influence on what gets funded and what does not.

In SEA: operators, seed engines, and sovereign-linked conviction

• East Ventures, one of the region’s most consistently active venture investors. Tracxn listed East Ventures among SEA’s top overall investors, which fits its long-running pattern of building portfolios across Indonesia and the broader region. The important point for 2025 is consistency: in a cautious market, repeatable check-writers become the backbone of early-stage survival. When the cycle turns risk-off, the investors who never stopped underwriting fundamentals become disproportionately influential.

• 500 Global, still a high-frequency participant, particularly at the earlier end. Tracxn’s reporting places 500 Global among the most active investors historically in SEA, and it continues to show up in the region’s seed machinery. In 2025, platform investors with repeatable playbooks, talent networks, distribution support, follow-on connectivity, gained leverage because founders needed more than a single round, they needed a path. The result is a market where consistency and portfolio services can matter as much as pricing.

• Wavemaker Partners, a signal of how institutionalized the seed layer has become. Tracxn also flags Wavemaker as a top investor, reflecting a broader SEA reality: the seed market is thinner, but the seed process is more professional. In 2025, seed-stage spray declined, but seed-stage selection tightened, backers leaned toward teams with distribution clarity and fast validation loops. For founders, that meant clearer milestones and fewer concept-only financings.

• Temasek and the sovereign-adjacent ecosystem, increasingly visible around infrastructure bets. Temasek’s presence in Amperesand’s Series A is a direct example of sovereign-linked capital leaning into AI-era infrastructure. Meanwhile, the private-credit facility around Atome Financial also points to how institutional capital and venture debt providers are becoming part of the SEA growth toolkit. In 2025, sovereign-linked money was not just a late-stage liquidity source, it was part of the region’s strategy to own critical layers of the AI and fintech stack.

In MENA: domestic champions, private credit, and sovereign-scale ambition

• Local VC leaders, including STV, Wa’ed Ventures, and Raed Ventures, driving a meaningful share of regional activity. Wamda explicitly pointed to domestic firms like these as major drivers of H1 2025 funding activity, especially as Saudi Arabia captured a large share of the region’s deployed capital. In a market where policy, regulation, and ecosystem access can be decisive, local investors often have structural advantages in sourcing and support. The result in 2025 was not just more deals, but more locally anchored conviction.

• Private credit players and sovereign platforms, underwriting the scale phase. Arab News highlighted Stride Ventures’ plans for significant deployment in Saudi Arabia, reflecting a broader embrace of venture debt and private credit as growth tools. At the same time, Reuters’ reporting on Qatar’s AI infrastructure joint venture shows what happens when sovereign ambition meets strategic capital formation: the checks get very large, very fast. In 2025, MENA’s edge was not only startup energy, it was the ability to pair that energy with capital at national scale.

The thread that ties SEA and MENA together

Across both regions, 2025 rewarded builders of pipes, financial pipes, compute pipes, workflow pipes, and distribution pipes. In SEA, the market stayed selective, pushing startups toward disciplined growth and structured financing, with late-stage carrying a bigger share of capital.

In MENA, the market stayed active, but with debt playing an outsized role and sovereign-scale initiatives shaping where the ecosystem is headed.

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