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Laxman Pai, Opalesque Asia: Venture Capital investment and deal volume in the Asia Pacific (Apac) region dropped to $12.9 billion in investment across 2,149 deals in Q1'25 - the lowest levels the region has seen in over ten years.
According to KPMG Private Enterprise's Venture Pulse, 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.
However, 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.
Further, the report revealed that VC investment in China was muted in Q1'25, both as a result of a natural slowdown in deal activity related to the Chinese New Year and because of ongoing economic challenges.
Following trends seen in recent quarters, much of the VC investment in China during Q1'25 occurred in areas considered to be major government priorities, including hard technologies, new energy, electric vehicles, and AI.
VC investors in China also continued to show interest in earlier-stage companies, evidenced by the popularity of pre-Series A deals during the quarter. This likely reflects a desire to invest in companies early to leverage the growth when their technologies are ready to be monetized in the market.
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