(March 13): Southeast Asia’s venture capital market is recovering, but the rebound is uneven. While overall deal activity has strengthened after the funding recalibration that followed the exuberant 2020–2022 cycle, female-founded companies (FFC) are capturing a smaller share of that recovery.
 
The implication is not simply about representation. It raises a more strategic question for investors and policymakers: whether the mechanisms through which venture capital identifies opportunity are sufficiently broad to capture the full spectrum of entrepreneurial talent emerging across the region.

Research conducted by OSK Ventures International, combining transaction-level investment data with a regional survey of founders, suggests three structural dynamics shaping the current landscape: capital concentration in specific sectors; tightening entry points into early-stage funding; and, the influence of investor decision-making frameworks. Together, these factors help explain why participation gaps persist even as the market rebounds.

For investors and business leaders in Malaysia and across Southeast Asia, the key question is whether the recovery is activating the full spectrum of entrepreneurial talent emerging across the region.

The recovery in Southeast Asia’s venture market is visible in the numbers. Early-stage transactions increased across the region in 2025, with overall funding activity rebounding sharply after two years of contraction. FFC have benefited from this rebound in absolute terms. Funding directed toward such companies as of August 2025 had already surpassed full-year 2024 levels by roughly 25%.

However, relative participation tells a different story.
FFC accounted for 18% of deals and roughly 12% of capital deployed across Southeast Asia’s venture ecosystem in 2025. Both figures represent a decline in share compared with earlier periods when female participation was higher.

In other words, capital is flowing again but through increasingly selective channels. This pattern is particularly visible at the Seed stage, the point where institutional capital first intersects with new company formation. 

While Seed deals have increased as a proportion of venture activity across Southeast Asia, participation by FFC has declined, from 58% of Seed deals in 2022 to around 53% in 2025.

The implication is clear, entry points into venture funding are tightening precisely where founders need them most.

“As Southeast Asia’s venture market recovers, it is also an opportunity to reflect on how female talent is recognised across the start-up ecosystem. Ensuring that a broader range of entrepreneurs can participate will be important in unlocking the region’s full entrepreneurial potential. Long-term institutional investors also play a role in supporting strong capital markets that allow innovative businesses to develop and grow,” says Datuk Nik Amlizan Mohamed, CEO of Kumpulan Wang Persaraan (Diperbadankan) (KWAP).

A second factor shaping participation is sector concentration.
The recovery in Southeast Asia’s venture market during 2025 has been heavily driven by investment in software and artificial intelligence-enabled technologies. According to OSK Ventures’ classification, IT-related companies accounted for nearly 60% of Seed-stage venture transactions in terms of number of funding deals across the region this year.

Yet female founder participation within these sectors remains extremely low. FFC represented around 5% of deals within the IT segment during the same period. Instead, female founders remain more heavily represented in sectors such as financial services, healthcare, consumer platforms and retail. This divergence is not accidental.

Many of these companies are tackling structural gaps within Southeast Asia’s economy, particularly in areas such as financial inclusion, access to healthcare and consumer services. Within financial services, for example, a large share of FFC in 2025 were focused on lending and financing platforms, addressing persistent credit constraints facing businesses across the region.

Seen in this context, the divergence may reveal less about founder capability than about how venture markets currently interpret opportunity. When capital clusters around particular technology narratives, as it currently does around AI, sectors solving more grounded structural problems may receive less attention despite their commercial potential.

The divergence between where companies are being built and where capital flows also reflect the nature of venture capital itself. Unlike public markets, venture investing is not purely mechanical. Investment decisions rely heavily on pattern recognition, narrative conviction and subjective judgments about founder potential.

While there is limited empirical data on gender representation among senior investors in Southeast Asia, anecdotal evidence suggests that leadership positions within venture capital firms remain predominantly male.

Why does this matter? Because the composition of investment committees influences how opportunities are interpreted. One investor may prioritise aggressive growth trajectories and bold founder narratives. Another may focus on capital efficiency, operational discipline and durable business models. Neither lens is inherently right or wrong. However, when certain perspectives dominate, they inevitably shape which founders and ideas are recognised as venture-scale opportunities.

“Having spent the past 25 years investing across private markets, from seed-stage start-ups to buyouts and reviewing thousands of deals, I can say with confidence that this decade is an exciting time for female entrepreneurs. While many of the challenges highlighted in this research do exist, studies like this and open platforms for dialogue are helping to surface the subconscious biases that still persist within the investment community,” notes Datuk Darawati Hussain, chairman of Jelawang Capital’s Investment Panel. 

“Many female founders fall outside the industry’s traditional pattern recognition of what a ‘typical’ founder looks like. Yet this is not due to any lack of vision, capability, or ambition. Venture capital remains a powerful source of funding for bold ideas, and as more women take seats at the decision-making table and write cheques, I am confident we will see growing momentum and visibility for female founders,” she adds.

To complement transaction data, OSK Ventures surveyed female founders across Southeast Asia. The responses reveal a striking pattern: many companies are already operating with the financial discipline investors increasingly demand. Among survey respondents: 64% reported that their companies are profitable or close to breakeven while 36% have never raised external capital. 

At the same time, founders rated their overall fundraising experience at 2.95 out of 5, with perceptions of investor inclusiveness scoring 2.72 out of 5. Two challenges surfaced most consistently: access to capital networks and implicit bias in investor perception.
One of the respondents described the persistence required to navigate early-stage scepticism.

“Very few investors believed in us pre-revenue, and even after we started showing traction many still doubted that we could scale. The scepticism did not fully disappear even after we grew volume fourfold, but navigating that taught me to trust my own conviction more than external validation,” shares a founder of an early-stage financial services company.
Yet optimism remains. Respondents rated their outlook for gender equality in the ecosystem over the next five years at 3.32 out of 5.

The recovery in Southeast Asia’s venture market is real. But the opportunity before the ecosystem is not merely to restart investment activity.

It is to ensure that the mechanisms through which capital flows are broad enough to recognise the full range of entrepreneurial talent emerging across the region. FFCs across Southeast Asia are already demonstrating capital discipline, operational resilience and problem-solving approaches that align with the market’s growing emphasis on sustainable growth.

For investors and ecosystem builders, the challenge now is to widen the funnel through which these opportunities are surfaced, evaluated and funded.