Asia

AI enablement emerged as a high priority for VC investors across Asia in Q4’25, attracting significant levels of capital despite overall regional investment remaining modest. In China, while broader VC activity stayed subdued, the two largest deals of the quarter were both concentrated in autonomous driving, with DeepBlue Auto raising $867 million and Neolix Technologies securing $600 million — highlighting continued investor conviction in select, strategically important AI applications.

Across the wider region, AI-focused investment skewed heavily towards enablement infrastructure rather than end-user applications. One of the notable rounds included a $541 million raise by Australia-based AI infrastructure provider Firmus Technologies. Robotics emerged as one of the most active AI sub-sectors, with significant raises by China-based GalBot ($300 million), Juxie Intelligent ($281 million), Cornerstone Robotics ($200 million), and Robotera ($141 million), alongside a $155 million round for India-based Miko Robot.

Japan also recorded strong AI-related megadeal activity during the quarter, with industrial automation company Mujin raising $235 million and foundational AI model developer Sakana AI securing $135 million. Together, these transactions underscore the growing emphasis on AI infrastructure, robotics, and automation across Asia, even as overall VC activity remains selective and uneven across markets.

Exit activity across Asia improved meaningfully in 2025, driven primarily by strong momentum in India and Hong Kong. In India, exit value surged in Q4’25 to the second-highest level on record—trailing only Q4’21 — as a wave of VC-backed companies accessed the public markets. Notable IPOs during the quarter included an $824 million offering by eyewear e-commerce platform Lenskart, a $394 million IPO by edtech provider Physics Wallah, and a $144 million listing by home solutions e-commerce company Wakefit.

The post-IPO performance of these companies, particularly in the e-commerce sector, will be an important indicator to monitor over the coming year, as sustained trading performance could materially influence investor appetite for future listings.

Hong Kong also experienced robust IPO activity in 2025, especially during the first half of the year. Momentum remained solid in Q4’25, supported by a sizable pipeline of companies that have filed confidentially for IPOs. Many issuers are adopting a patient approach, waiting for optimal market conditions before proceeding with their listings.

Venture capital investment in India remained stable throughout 2025, with a modest quarter-over-quarter increase to close out the year. The market continued to demonstrate breadth, with a diverse group of companies raising $100 million-plus rounds during the quarter. Notable transactions included a $600 million raise by mobile payments platform PhonePe, a $244 million financing for cleantech company Goldi Solar, and a $155 million round for education-focused AI robotics firm Miko Robot.

E-commerce and consumer platforms continued to attract significant investor interest, with large rounds raised by quick-commerce and retail leaders, including $450 million for Zepto Marketplace and $381 million for eyewear e-commerce company Lenskart.

While quick commerce has drawn substantial capital, investor scrutiny around burn rates and long-term profitability is increasing. These dynamics will be closely watched heading into 2026, particularly as several companies in the sector begin to consider potential IPO exits.

Venture capital investment in Japan surged in Q4’25, reaching nearly $1.9 billion across 320 deals. This strong finish propelled full-year VC investment to more than $5.8 billion, second only to the previous annual record set in 2021. The quarter was marked by several $100 million-plus megadeals, including a $235 million round for intelligent automation and robotics firm Mujin, and a $135 million financing for foundational AI model developer Sakana AI.

Collaboration between corporates and startups emerged as a defining theme during the quarter, as large Japanese companies increasingly turned to venture-backed innovation to address internal operational and strategic challenges. These partnerships and investments are expected not only to accelerate startup growth over the coming quarters, but also to encourage broader corporate participation in venture investing as firms seek to remain competitive in rapidly evolving markets.

At the same time, macroeconomic conditions in Japan softened in Q4’25, with a weakening yen and interest rates rising to a 30 year high. These dynamics introduced some caution among investors, particularly banks and financial institutions that have historically played an important role in seeding new funds. As a result, VC investors increasingly concentrated capital in more established startups with proven traction and higher probabilities of success, rather than earlier-stage or unproven ventures. How this shift influences deal formation and innovation dynamics will be an important trend to watch heading into 2026.