Southeast Asia’s Power Moves – October 2025

Southeast Asia’s venture capital market hit a six-year low: $1.85 billion raised in H1 2025, with Indonesia’s startup funding down 43%. By Q3, Asia’s VC investment totaled just $16.8 billion—well off historic norms. But beneath the surface, capital is moving with surgical precision. The region is restructuring, not declining, and operators who mistake contraction for crisis will miss a rare window to build for the next decade.

Power Moves That Matter

1. CATL’s $6B Indonesian Battery Complex
China’s Contemporary Amperex Technology Co. (CATL) broke ground on Southeast Asia’s largest battery manufacturing venture in June. Spanning 2,000 hectares, it’s not just a factory—it’s a value chain: nickel mining to battery recycling, with enough capacity for 300,000 EVs/year.

• Strategic context: President Prabowo’s downstreaming leap positions Indonesia as a global hub, exploiting its world-leading nickel reserves.
• Geopolitical contrarianism: As U.S.-China decoupling accelerates, Chinese capital finds “safe harbor” in Indonesia, betting on resilient supply chains as Vietnam faces rising tariffs.
• Key risk: New solid-state and sodium-ion batteries could challenge nickel-heavy tech before this mega-project matures.

Takeaway: This is industrial scale hedging—betting on manufacturing sovereignty in an era of fragmenting supply chains.

2. Singapore’s Stablecoin Framework: Regulation as Infrastructure
While crypto markets swung wildly, Singapore’s Monetary Authority quietly built Asia’s defining digital asset regulatory architecture.

• Framework highlights: 1:1 reserve backing, strict redemption rules, and SGD/G10 currency peg requirements set institutional standards.
• Why it matters: Regional neighbors and the U.S. are following suit, but Singapore is out front, shaping the rails for cross-border trade within ASEAN (Project Nexus).
• Contrarian view: Conservative guardrails could slow innovation, risking lost first-mover advantage to Hong Kong or more agile jurisdictions.

Takeaway: Singapore’s play is regulatory clarity. Gravitas comes from building trust—the bedrock for digital money adoption in ASEAN.

3. Project Nexus: The Boring Infrastructure Play Everyone Will Need
Beneath startup headlines, BIS’s Project Nexus is building instant payment connectivity across Indonesia, Malaysia, Philippines, Singapore, and Thailand.

• Current pain: Cross-border transactions cost 3-7%, take days, and require complex banking relationships.
• The promise: Settle payments in seconds at near-zero cost, compressing working capital cycles for SMEs and defunding intermediaries.
• Multilateral coordination: Rather than bilateral spaghetti, Nexus builds a hub model—one connection, many partners.

Takeaway: Payments infrastructure is the new regional glue. The next trillion-dollar market shift is invisible but transformative.

Ecosystem Signals

• Manufacturing is repatriating. Regional hubs in Jakarta, Ho Chi Minh, and Manila are attracting talent; brain drain is reversing.
• Investment is bifurcating: VC funding is down, but hard infrastructure spends are surging—Malaysia, Thailand, and the Philippines lead in hyperscale data center growth.
• Geopolitical arbitrage is real: Companies are diversifying production to mitigate regulatory, tariff, and labor risk.

Investment Intelligence: What Operators and Investors Should Do

Founders

• Default to profitability. If burn >12 months of runway, risk is existential. Shopee’s path—cutting losses while sustaining growth—is your template.
• Go cross-border from day one. Regulatory fragmentation makes single-market bets riskier.
• Sell to businesses, not just consumers. B2B SaaS, infrastructure, and embedded finance offer better retention and margins. Example: Mochi + PayMongo partnership.
• Overinvest in governance. Hire a CFO early, keep cap tables clean, build audit-ready financials.

Investors

• Watch the Grab-GoTo merger. Will regulators greenlight consolidation or trigger more platform failures?
• Signal check for stablecoin velocity. Whoever cracks fast, compliant cross-border payments gets outsized returns.
• Track the real AI investments. Data centers and GPU clusters, not consumer apps, are attracting the real capital.
• Spot nearshoring winners. Manufacturing is fragmenting; joint ventures in semiconductors, rare earths, and pharma are next.

Underpriced Opportunities

• Infrastructure, not apps. Data centers, payment rails, identity/KYC solutions—these are where the durable value and defensive moats are being built.
• Embedded finance in vertical SaaS. Every platform that enables payments, lending, and treasury will take a cut of every transaction.
• Regulation as a moat. Companies that embrace compliance as infrastructure will capture institutional trust and capital.

Frames for the Next 12-24 Months

1. Regulation is table stakes. Policy clarity and compliance are competitive advantages.
2. Geographic diversification is risk management. Multi-market execution beats single-country bets.
3. Profitability unlocks optionality. Only profitable companies survive sell-downs, acquire assets, and scale on their terms.
4. AI is a margin expander. Winning AI plays help existing businesses improve margins, not just deliver novelty.

Southeast Asia isn’t in crisis—it’s in transition. The region’s next chapter is being written quietly in boardrooms and infrastructure projects, not just in startup pitch decks. The power moves—CATL’s complex, Singapore’s regulatory framework, Project Nexus—all lay the rails for the decade to come. Selective capital, regulatory gravitas, and operational discipline are the new marks of durability.
This isn’t the worst time to build; it’s the best—if you build for what’s under the surface, not just what makes headlines.