AI fever leaves South-east Asia's consumer startups fighting for attention

Funding for consumer startups in Southeast Asia has tumbled from a peak of US$6 billion in 2022 to just US$580 million in the first half of 2026, a shift that has left many consumer-facing firms scrambling for capital as venture capital flows reallocate to AI and B2B productivity plays. The trend is stark: data center operator DayOne alone captured US$4.5 billion in H1 2026, while historically high-profile consumer rounds such as Kopi Kenangan’s US$109 million (2020) and US$96 million (2021) have become outliers rather than the norm.

“These days, they want to know if you can expand outside of Indonesia, too,” says Susanna Angraini, CEO of Yoona, an Indonesian organic sanitary pad brand, explaining why fundraising has grown tougher even for profitable consumer product companies. Yoona has secured a lead investor for its ongoing pre-series A round but is struggling to find additional backers amid increased scrutiny over growth pace.

Context: investor reticence and shifting priorities

Venture capital is increasingly favouring AI, data infrastructure and B2B startups in the region. Tracxn data shows that more than half of total startup funding in the first half of 2026 went to DayOne. Investors and analysts say the economics of scaling consumer businesses have become harder to underwrite as customer acquisition costs rise and the path from scale to profitability is less clear.

• Notable consumer-sector raises in the past year include buy now, pay later firm Atome (US$81 million) and used-car marketplace Carsome (US$30 million).
• Exceptions like Thailand-based beauty commerce firm Konvy raised US$22 million in May 2026, but such rounds are rare.

“Competition has grown, and the path from scale to profitability has become less clear for investors than expected,” says Melanie Tng, analyst at PitchBook, summing up why many VCs are reallocating capital away from consumer verticals. Kevin Wijaya, director of CyberAgent Capital, adds that as VCs tighten their purse strings, several firms have turned to alternative financing such as debt, angel investors and family offices.

Macro headwinds are compounding the shift. Slowing economic growth, softer consumer spending and higher oil prices driven by the US–Middle East conflict have made consumer revenue projections less reliable. Sameer Mehta, managing director of DSG Consumer Partners, says the environment is “quieter” but not collapsed: “Funding rounds are taking longer to close and valuations of startups are getting more scrutiny. It helps us filter for founders who are building real businesses with a real reason to exist.”

Outlook: pivots, discipline and continued consumer demand

Despite the downturn in consumer funding, some investors remain bullish on the long-term case for consumer startups in Southeast Asia. “Half of the world’s population live on this side of the world – Southeast and South Asia. All of these people will consume – whether food or necessities,” says Nikko Guiam, senior associate at Founders Launchpad, noting the region’s demographic tailwinds. CyberAgent’s Wijaya concurs: “It’s understandable that AI will get the investor spotlight. But in Southeast Asia, consumers still drive the economy. It will be hard to ignore for investors.”

Practical responses from founders include tighter cash management, pricing adjustments and business-model pivots. Kiyanusch Braun, CEO of GoRocky, says the firm lowered prices and extended installment options in response to lower disposable incomes. Other companies have shifted operations entirely—Flash Coffee founders moved to building white-labelled apps for F&B, and livestreaming platform Kumu is piloting a data annotation service to monetise its user base.

For now, the next venture cycle in Southeast Asia appears to favour productivity and infrastructure, but disciplined consumer founders who can demonstrate clear unit economics, cross-border potential and innovative monetisation models may still find patient capital.