Against a backdrop of geopolitical uncertainty and renewed concerns over tariffs and trade tensions, global Venture Capital (VC) investment rose from $118 billion in Q4’24 to $126 billion in Q1’25, fueled by a wave of megadeals — including eight $1 billion+ transactions and a standout $40 billion raise by OpenAI.
Despite the uptick in investment value, deal volume declined quarter over-quarter as many VC investors paused to evaluate whether market shifts were temporary and to preserve capital in light of ongoing IPO exit delays. Deal-making also slowed as firms adapted to evolving investment considerations.
Both venture capital investment and deal volume declined in Asia during Q1 2025, with the region raising just $12.9 billion across 2,149 deals — reflecting continued softness in the market. The downturn was largely driven by persistent challenges in China, including economic uncertainty and ongoing real estate sector issues, as well as heightened investor caution in India, amid broader geopolitical tensions. Singapore was the lone bright spot, bucking the regional trend thanks to a $1.2 billion raise by data center company DayOne, which significantly boosted the country’s quarterly totals
The AI space in Asia attracted a significant amount of attention in Q1’25, driven by the launch of China-based DeepSeek’s R1 model. This was seen as a major win for China’s AI sector, given the expectation that access to DeepSeek’s open source model will help a lot of AI application companies further advance their own models and AI-driven solutions. During the quarter, two Chinese tech giants also launched major AI offerings — including Tencent, which launched the T1 reasoning model, and Alibaba, which released the Qwen 2.5 artificial intelligence model. This feverish level of activity highlights the highly competitive nature of the space and the quest for dominant market position.
Heading into Q2’25, VC investment in Asia is expected to remain subdued, particularly giving geopolitical uncertainties. If China’s central government moves to support the development of the private sector, it could spark improved confidence among VC investors and potentially drive an uptick in investment in China. VC investment in India could remain somewhat soft in Q2’25, although the long-term outlook remains positive given the country’s strong macros. In Japan, corporate investment will be one area to watch in Q2’25, both in terms of direct VC investment and M&A activity.
A Philippine Perspective
On the Philippine end, the VC landscape is also experiencing growth. $1.12 billion in deals in 2024 were recorded in the Philippines, signaling a shift in balance in the region. Fintech leads the way as the most active sector for deals in 2024 with direct-to-consumer and cleantech on the rise as well.
