Asian Startup Funding Trends: Decline in 2025 with Q4 Recovery
In 2025, Asian startup funding fell to $67.5 billion, a 6% drop from the previous year and the lowest in five years, despite a robust recovery in Q4 with $21.7 billion invested. The MENA region saw a 38% year-on-year funding decline, with Saudi Arabia raising the most at $115 million. This figure represented a 19% increase compared to the third quarter and a 22% rise when compared year over year.
In 2025, Asian startup funding experienced a notable decline, with a total investment amounting to $67.5 billion, marking a 6% decrease from the previous year. This annual total represents the lowest level of funding in five years, despite a significant recovery in the fourth quarter of the year.
A Surge in Fourth Quarter Investments
The fourth quarter of 2025 marked a turning point, with the highest quarterly investment recorded for the year at $21.7 billion. This figure represented a 19% increase compared to the third quarter and a 22% rise when compared year over year. Such data indicates an upward momentum in startup funding as the year drew to a close.
Later-stage startups attracted considerable attention during this period, securing $10.4 billion in funding in Q4 alone, contributing to a full-year total of $30.8 billion. Early-stage deals accounted for $8.9 billion, while seed-stage deals brought in $2.1 billion in the fourth quarter.
Sector-Specific Funding Patterns
AI-related startups garnered significant interest throughout 2025, accumulating a total of $16.7 billion in funding, with 38% of that amount raised in the final quarter. Security startups also saw substantial investment, with $18 billion allocated across the year.
Fintech, a notable sector, experienced a 27% increase in funding in 2025, showcasing its resilience and growth potential. Globally, Q4 2025 was the strongest quarter for startup funding since Q2 2022.
Regional Dynamics: China and India Lead
China maintained its position as the leader in Asian startup funding throughout 2025, followed closely by India. Despite the overall annual decline, these countries continued to attract significant venture investment, illustrating their central roles in the region's startup ecosystem.
MENA Region: Selective and Uneven Funding
In December 2025, startup funding in the Middle East and North Africa (MENA) region amounted to $171.5 million, with 44 startups securing funding. However, this represented a 38% year-on-year decline and a 24% drop compared to November 2025, highlighting the selective and uneven nature of funding in this region.
Debt financing accounted for 12.5% of the total funding, with Saudi Arabia leading the region by raising $115 million across 17 startups. Egypt and the UAE followed, raising $27.3 million and $21.4 million, respectively. Fintech ranked seventh in terms of funds raised, securing $3.9 million, while B2B startups led the way with $154.7 million raised across 33 rounds.
Consumer startups in the MENA region raised $6.3 million, distributed among five companies. Meanwhile, female-founded startups faced challenges, raising only $116,000, while mixed-gender teams secured $5 million. The persistent funding gap for female founders highlights an ongoing preference for male-founded startups in the region.
Overall, while 2025 saw a decline in Asian startup funding, the signs of recovery in the fourth quarter, coupled with sector-specific growth and regional dynamics, suggest potential for renewed growth in the coming years.