AI and Digital Financial Services Remain Bright Spots for Investors
In 2025, Southeast Asia's digital economy is projected to surpass US$300 billion in Gross Merchandise Value (GMV), and revenues are expected to reach US$135 billion, marking 15 percent year-on-year growth. Throughout the region, investor confidence has been cautiously rebounding, with private funding from private equity and venture capital firms increasing by 15 percent to about US$7.7 billion over the past year, particularly for late-stage deals. Singapore has recently launched the second Data Center – Call for Application (DC-CFA2), recognizing the growing demand for green data centers due to surging AI adoption. However, investment growth in Southeast Asia from private equity and venture capital firms remains below the global average of 25 percent growth. The slowed growth in mature sectors has led to regional consolidation, and a lack of clear exit pathways has led to some muted investor confidence. Digital financial services and AI remain key focus areas for investors, accounting for 45-50 percent and 30 percent of private funding respectively.