Asia Sags To Lows Not Seen Since 2014
While OpenAI’s massive $40 billion funding boosted global and North America’s funding totals, Asia was not so lucky.
Instead, the region saw its lowest funding quarter since 2014, with only $13 billion going to VC-backed startups, per Crunchbase data.
That number represents a whopping 40% drop from Q1 last year and a 25% decrease from Q4 2024.
It’s also another sign of the area’s lagging venture market — which has seen declines in four of the last five quarters.
All told, the total dollar figure for investment is the lowest since Asia saw only $12.3 billion go to its startups in Q4 2014.
Table of contents
- Late-stage blues
- AI down?
- Early stage and seed get no bettors
- Country breakdown
- What it means
- Methodology
- Glossary of funding terms
Late-stage blues
Leading the steep declines was again late-stage and technology growth investment, which totaled only $6.1 billion in 145 deals.
The dollar figure is a 29% fall off from Q4 and a 27% drop from the same quarter a year ago. The deal volume decline is a 6% fall from Q4 and a 25% decrease from Q1 2024.
The largest late-stage deals all came from China, and included:
- Waste disposal firm Shenzhen Energy Environmental Protection raised a $692 million venture round last month.
- Smart Fabric, which provides internet-enabled solutions for the textile industry, raised a $460 million Series C in January.
- China-based Zhipu AI, a startup creating AI models and a Chinese competitor to OpenAI, raised a $247 million private equity round last month.
As has been said before, while early-stage rounds saw a bigger percentage decline dollar-wise, late-stage rounds really dictate the size of funding totals. It may take 10 or more early-stage rounds to make up for just one late-stage deal, so the decline cannot be overstated.
AI down?
Another interesting aspect of Asia’s funding last quarter was that while AI was all the rage globally, funding to Asia-based AI startups actually fell.
AI startups in the region saw only $1.8 billion in funding — 14% of the area’s total. That dollar number is half of what it was a year ago and 23% less than what it was even in Q4.
Early stage and seed get no bettors
Similar to late-stage, both angel/seed and early-stage rounds also saw a significant decline.
Early-stage rounds in Asia totaled only $5.3 billion in 533 announced deals. That’s a 21% drop from Q4 and a massive 53% fall from the same quarter a year ago.
The deal flow is a 16% drop from Q4 and a 19% decline from Q1 2024.
Seed and angel fared about the same. Only $1.6 billion was raised by young startups in Asia last quarter in a paltry 791 deals. Dollar-wise that’s a 22% drop from Q4 and a 16% reduction from a year ago.
The angel/seed deal flow number is a 19% decrease from the final quarter last year and a whopping 48% drop from a year ago.
Country breakdown
While China had the largest rounds, it is also the main reason for the decrease. China’s share of venture was almost halved from just a year ago. Chinese startups raised only $6.5 billion, compared to $12.5 billion in Q1 2024 and $8.2 billion in Q4.
In fact, only two of Asia’s top venture markets saw an increase from a year ago — and those were very slight. Israel saw a slight tick up to $1.1 billion in the quarter, from $800 million in Q1 2024 but down from Q4.
Similarly, Japan funding hit $600 million, up from $500 million in Q1 last year, but down more than half from the $1.3 billion raised in Q4.
What it means
Obviously no region has been affected more by conflict and geopolitical tensions than Asia.
Those are likely the main reasons behind the funding decline. The icy relationship between China and the U.S. has forced many U.S. investors out of the region — especially with security concerns around chips and AI.
China’s economy is still reeling from lower consumer spending and recovery has been slow.
On top of that, conflict in the Middle East continues, affecting a VC hotspot: Israel.
Of course, as we just witnessed on this side of the Pacific, one round can flip an entire quarter, and Asia may soon see such a round.
Chinese AI darling DeepSeek is reportedly considering outside funding for the first time. The startup sent the AI world — and the economy — reeling in January with its low-cost AI models that could outperform the bigger, much-more heavily funded AI startups in the West.
However, per the report, the startup now needs more AI chips and servers to keep up with demand and is looking to fundraise. The round has already drawn interest from Alibaba, China Investment Corp. and the National Social Security Fund.
Such a round could make the second quarter a different story.
Methodology
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of April 2, 2025.
Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.
Please note that all funding values are given in U.S. dollars unless otherwise noted.
Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of funding terms
Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.
Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.
Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)
Related reading:
- Q1 Global Startup Funding Posts Strongest Quarter Since Q2 2022 With A Third Going To Massive OpenAI Deal
- North America Startup Investment Spiked In Q1 Due To OpenAI, But Seed And Early Stage Fell
Illustration: Dom Guzman
Read More
March Mints 11 New Unicorns, As $200B Is Added Through Up Rounds And Board Posts Strong Exits
Cybersecurity Funding Ticks Up Despite Slow Deal Flow
Asia Sags To Lows Not Seen Since 2014
While OpenAI’s massive $40 billion funding boosted global and North America’s funding totals, Asia was not so lucky.
Instead, the region saw its lowest funding quarter since 2014, with only $13 billion going to VC-backed startups, per Crunchbase data.
That number represents a whopping 40% drop from Q1 last year and a 25% decrease from Q4 2024.
It’s also another sign of the area’s lagging venture market — which has seen declines in four of the last five quarters.
All told, the total dollar figure for investment is the lowest since Asia saw only $12.3 billion go to its startups in Q4 2014.
Table of contents
- Late-stage blues
- AI down?
- Early stage and seed get no bettors
- Country breakdown
- What it means
- Methodology
- Glossary of funding terms
Late-stage blues
Leading the steep declines was again late-stage and technology growth investment, which totaled only $6.1 billion in 145 deals.
The dollar figure is a 29% fall off from Q4 and a 27% drop from the same quarter a year ago. The deal volume decline is a 6% fall from Q4 and a 25% decrease from Q1 2024.
The largest late-stage deals all came from China, and included:
- Waste disposal firm Shenzhen Energy Environmental Protection raised a $692 million venture round last month.
- Smart Fabric, which provides internet-enabled solutions for the textile industry, raised a $460 million Series C in January.
- China-based Zhipu AI, a startup creating AI models and a Chinese competitor to OpenAI, raised a $247 million private equity round last month.
As has been said before, while early-stage rounds saw a bigger percentage decline dollar-wise, late-stage rounds really dictate the size of funding totals. It may take 10 or more early-stage rounds to make up for just one late-stage deal, so the decline cannot be overstated.
AI down?
Another interesting aspect of Asia’s funding last quarter was that while AI was all the rage globally, funding to Asia-based AI startups actually fell.
AI startups in the region saw only $1.8 billion in funding — 14% of the area’s total. That dollar number is half of what it was a year ago and 23% less than what it was even in Q4.
Early stage and seed get no bettors
Similar to late-stage, both angel/seed and early-stage rounds also saw a significant decline.
Early-stage rounds in Asia totaled only $5.3 billion in 533 announced deals. That’s a 21% drop from Q4 and a massive 53% fall from the same quarter a year ago.
The deal flow is a 16% drop from Q4 and a 19% decline from Q1 2024.
Seed and angel fared about the same. Only $1.6 billion was raised by young startups in Asia last quarter in a paltry 791 deals. Dollar-wise that’s a 22% drop from Q4 and a 16% reduction from a year ago.
The angel/seed deal flow number is a 19% decrease from the final quarter last year and a whopping 48% drop from a year ago.
Country breakdown
While China had the largest rounds, it is also the main reason for the decrease. China’s share of venture was almost halved from just a year ago. Chinese startups raised only $6.5 billion, compared to $12.5 billion in Q1 2024 and $8.2 billion in Q4.
In fact, only two of Asia’s top venture markets saw an increase from a year ago — and those were very slight. Israel saw a slight tick up to $1.1 billion in the quarter, from $800 million in Q1 2024 but down from Q4.
Similarly, Japan funding hit $600 million, up from $500 million in Q1 last year, but down more than half from the $1.3 billion raised in Q4.
What it means
Obviously no region has been affected more by conflict and geopolitical tensions than Asia.
Those are likely the main reasons behind the funding decline. The icy relationship between China and the U.S. has forced many U.S. investors out of the region — especially with security concerns around chips and AI.
China’s economy is still reeling from lower consumer spending and recovery has been slow.
On top of that, conflict in the Middle East continues, affecting a VC hotspot: Israel.
Of course, as we just witnessed on this side of the Pacific, one round can flip an entire quarter, and Asia may soon see such a round.
Chinese AI darling DeepSeek is reportedly considering outside funding for the first time. The startup sent the AI world — and the economy — reeling in January with its low-cost AI models that could outperform the bigger, much-more heavily funded AI startups in the West.
However, per the report, the startup now needs more AI chips and servers to keep up with demand and is looking to fundraise. The round has already drawn interest from Alibaba, China Investment Corp. and the National Social Security Fund.
Such a round could make the second quarter a different story.
Methodology
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of April 2, 2025.
Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.
Please note that all funding values are given in U.S. dollars unless otherwise noted.
Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of funding terms
Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.
Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.
Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)
Related reading:
- Q1 Global Startup Funding Posts Strongest Quarter Since Q2 2022 With A Third Going To Massive OpenAI Deal
- North America Startup Investment Spiked In Q1 Due To OpenAI, But Seed And Early Stage Fell
Illustration: Dom Guzman
Read More
March Mints 11 New Unicorns, As $200B Is Added Through Up Rounds And Board Posts Strong Exits