East Ventures’ market outlook 2025: Thriving in the new transitions and realizing a “believable Southeast Asia”

As new leaders take the helm in major countries, the global economic and market outlook is clearer, and promising opportunities are on the horizon. Projections indicate that the global growth is set to stabilize at around 3.1% over the next five years, indicating a resilient recovery from the pandemic’s impact.

This optimistic trajectory is bolstered by technological advancements, which are set to drive innovation and create new industries.

However, it is essential to acknowledge the rise of protectionism across major economies became a trend influenced by various economic and geopolitical factors. 

This evolving landscape could foster innovative approaches to trade that address local economic concerns while still engaging with global markets, ultimately reshaping the future of economic interdependence.

Notably, in Southeast Asia (SEA), robust consumption, expected improvement in investment, and continued tourism recovery will also support growth in 2025. The Fed’s rate cut in September will likely also benefit consumers and businesses. 

Moreover, the region’s GMV and revenue have both consistently grown double digits in the past year, according to the e-Conomy SEA 2024 report. We echo these findings and witness more companies focusing on profitability within our ecosystem.

The e-Conomy SEA 2024 report showed SEA’s digital economy trends and metrics, which became our baseline in assessing our portfolio performance. Firmly, we stand beyond the baseline, with revenue from our growth-stage portfolio companies rising 40% year-on-year (YoY), surpassing that of SEA by nearly triple. 

This not only underlines our approach to investment resilience but also positions us ahead of regional benchmarks among other companies and venture capital (VC) firms. Not to mention, this is thanks to our founders’ mindset that embraces adaptability, especially amidst economic downturns, market instability, and unpredictable landscapes.

Aligning to that, 70% of our growth-stage portfolio companies are profitable, and more than 80% have shown improved EBITDA margins in the past year, including Sociolla, ShopBack, The Parentinc, RPG Commerce, Praktis, Mighty Jaxx, Traveloka, Komunal, Fore Coffee, ISMAYA Group, IDN, Ruangguru, waresix, Inteluck, and Xurya.

This is in line with our firm conception that profitability is ultimately an important goal for our portfolio companies, despite the different approaches and journeys each startup takes towards it. Some of our portfolio companies are also well-positioned to ensure sustained financial stability backed with strong fundamentals.

To support their aspirations and long-term goals, we strive to foster synergy among our ecosystem members in these challenging times of navigating uncharted waters. In 2024, we also continued to organize East Ventures Hand in Hand, East Ventures Circle, and Founders Gathering for our portfolio companies.

These workshops aim to provide a platform for knowledge sharing among our ecosystem founders and further enhance their skills and capabilities in various industries.

We are always eager to back quality founders who are addressing real problems with meaningful solutions. For instance, we invested in Runchise, Bythen, Copra, and several others last year; and we are looking forward to discovering new ones this year. 

15 years of voyage

We celebrated our 15th year as one of the first movers in Indonesia and SEA’s tech and investment industry. It was not an easy sail through the still water, but by focusing on our core values and strengths, we rode the waves, evolved through challenges, and stayed confident in our ability to see beyond the obvious. 

For 15 years, we have built an expansive, solid, and vibrant ecosystem, with over 300 portfolio companies and more than 500 exceptional founders, to support nationwide goals and foster regional collaborations. 

The largest East Ventures Summit to date took place in Jakarta in July last year. More than 100 prominent speakers, including policymakers, leading investors, industry experts, acclaimed figures, and the brightest startup founders of the East Ventures ecosystem, spoke at the event, which also featured over 30 breakout panels happening in one day. 

For many, this annual Summit has become a platform to connect, share knowledge, encourage discussion, and build partnerships among stakeholders from investors, entrepreneurs, and corporates, to government bodies.

Charting Indonesia’s economic growth with a collaborative ecosystem

Within domestic Indonesia, the economy is also forecasted to outperform its pre-pandemic level, and Indonesia might be the only country in East Asia and the Pacific to experience positive economic growth in both 2024 and 2025.

Our optimism in Indonesia is further cemented with the launch of the fifth edition of East Ventures – Digital Competitiveness Index (EV-DCI), which has the theme of “Realizing Indonesia’s digital sovereignty”. The report showed a positive trend as the nation’s index grew from 37.8 in 2023 to 38.1 in 2024, underlining each province’s efforts in accelerating digital transformation to enhance its digital economy growth.

With this profound opportunity, we also collaborated with Praja Mangkunegaran, a royal monarchy on the island of Java, to become the official Digital Partner of Mangkunegaran. 

The Mangkunegaran has launched programs that empower MSMEs and collaborated with various stakeholders, acting as a catalyst for social and economic change. We are excited to leverage our capabilities as the leading Indonesian VC firm to support the “Culture Future” initiative wholly.

Mr. Joko Widodo’s presidential term and contributions for the past ten years have catapulted Indonesia’s tech startup landscape into a strategic position as a strong digital economy player that drives Indonesia’s economic growth. 

With the new presidential term under Mr. Prabowo Subianto’s leadership, Indonesia is expected to maintain its position—if not launch even further forward—and flourish into an even more mature stage with supportive policies.

Some of the new policies from the new Indonesian government are designed to increase the people’s prosperity and improve equality. Mr. Prabowo has also set sights on the objective of 8% economic growth for Indonesia within the next 2-3 years. This could drive local consumption and become a new engine of growth that will possibly accelerate the country’s new capabilities.

The way we see digital technology as one of the catalysts for what we have built for the past 15 years among other aspects, remains to be tried and true. 

However, Indonesia has yet to have a good, supportive ecosystem to foster this local pride. We look forward to seeing more policies cater to Indonesia’s startup landscape, investment in more local solutions, and more creative innovations from local entrepreneurs.

Now, more than ever, is the time for Singapore founders

Similarly, while Singapore’s startup ecosystem is relatively more mature than Indonesia’s, it also has its hurdles and challenges.

Government support has been remarkable, especially in fostering innovation around multiple sectors to drive Singapore economic growth. Moreover, Singapore also has an impeccably strong pool of talent and its infrastructure is well established. Yet, the problem statement and target market size have not matched this prospect.

The region’s challenge lies in its local market size—it may not be enough to support significant and sustainable growth for startups with a domestic focus only. If the opportunities are limited locally, startups must look beyond Singapore and target much larger markets to scale effectively, whether regionally to neighboring countries in SEA, or globally beyond the continent.

Founders, particularly in Singapore, are highly encouraged to address regional—or even global—problems, especially if they are tackling emerging, or relatively niche areas.

All in all, we believe 2025 represents an exciting venture for Singaporean entrepreneurs to kickstart their companies. What matters is whether they dare to take the leap of faith. Do founders have the grit to take the risk and be the movers and shakers?

Exploring new vistas in 2025

As we move forward in 2025, there will be several sectors that we will be focusing on the market outlook:

1. AI-first startups

By 2025, we can expect the AI startup scene to really take off. Around 25% of businesses will start using Generative AI (GenAI) and plan to implement AI agents, and this number is set to rise to 50% by 2027. This exciting growth is fueled by new innovations designed to help companies work more efficiently and boost productivity across different industries.

2. Healthcare innovations

Last year we continued to show our support for the Ministry of Health of Indonesia through the Health Innovation Sprint Accelerator (HISA) 2024, a healthtech competition aiming to bolster founders in navigating the challenges of entrepreneurship.

We have also been making strides in the Singaporean healthcare scene, as we actively collaborate with government initiatives to drive progress. For instance, we are an MOU partner with National Health Innovation Centre Singapore (NHIC).

Our market outlook for this year is that the healthcare industry will increasingly turn to AI to enhance patient care and streamline operations. More startups have started harnessing the power of AI for real-time diagnostics and creating personalized treatment plans. Some of East Ventures’ healthcare portfolio companies, such as MeshBio, Aevice Health, and PathGen, also use this approach.

3. Climate tech

This sector remains a critical area of focus especially in optimizing renewable energy use and carbon tracking. In April 2024, we again launched our annual Sustainability Report, demonstrating our continuous efforts and progress in integrating Environmental, Social, and Governance (ESG) frameworks in our operations and across our ecosystem.

Together with Kadin Indonesia, we also launched the Emission Calculator & Visualization Southeast Asia, or ECOVISEA, a free web-based greenhouse gas calculator. For this initiative, we have once again been recognized in the FORTUNE Indonesia Change the World list.

The highly anticipated Climate Impact Innovations Challenge (CIIC) also made a comeback last year, as we again collaborated with the Temasek Foundation. In 2024, we received an overwhelming response from over 500 applicants in more than 50 countries worldwide. Three climate innovators emerged as the champions who won a total of Rp 10 billion in grant funding to pilot their solutions in Indonesia, SunGreenH2, Hydrogen Refinery, and AC Biode. Additionally, DayaTani was selected to receive US$50,000 in investment from the Bakti Barito Foundation, while ENWISE was to receive US$50,000 in cash prizes from Sinarmas Agribusiness & Food. Bakti Barito Foundation selected DayaTani to receive US$50,000 in investment, and Sinarmas Agribusiness & Food awarded ENWISE a cash prize of US$50,000. The CIIC will be back again this year — Climate tech innovators, be sure to get your proposals ready!

Within our ecosystem, green-tech-focused companies such as Rekosistem and Jejakin are also working on these crucial matters. Solutions are being developed to enhance energy efficiency and reduce emissions, aligning with global sustainability goals.

Through our collaborative efforts and enduring commitment to green and climate technology, last year we were granted the “ESG Award: Best Investor on Impact Investment” by KEHATI.

4. Consumer tech

Advancements in e-commerce through personalized shopping experiences and customer service automation via chatbots will also continue to rise in consumer tech. The demand for smart solutions is expected to grow as businesses invest in tools that streamline operations. East Ventures-backed startups like Cosmart are tackling this and bringing better solutions for the shopping experience.

As we look ahead to the coming year, we are committed to establishing a dependable exit strategy that will enable Southeast Asia to fulfill its economic potential. We have had an unwavering belief in this region for more than a decade, and we will work hard and keep the focus on delivering to others, a believable Southeast Asia. We are confident that with focused efforts, this region will not only conquer its commitment but will also emerge as a beacon of economic strength on the global stage.

Being a Southeast Asian VC firm with the largest and most robust ecosystem, East Ventures is ready to embrace new transitions from global leadership changes and support the aspirations of new governments.

To founders, know that the coming year is not so bleak. Ultimately, access to funding is easier when you leverage the robust ecosystem between the public and private sectors. Remember that success is not chasing the latest buzzwords, but rather addressing real problem statements and creating positive impact.

Your innovation should not be a “one-size-fits-all,” and instead, you should focus on the core strengths and unique capabilities of your product, execution, and resilience. Founders who stay grounded and deliver value will always stand out, even in volatile times.