Despite its fragmented markets and myriad of cultures and spoken languages, Asia is becoming an increasingly popular home for budding tech and AI entrepreneurs, according to Magnus Grimeland, the founder and CEO of venture capital firm Antler.
“Going to the U.S. to build companies is still very popular and we see that happening at scale,” Grimeland said at the Fortune Southeast Asia 500 Summit in Vietnam on Nov. 3. “[But] for the first time ever in one of these platform shifts, there are real advantages in Asia that will lead to a lot of the leading companies being built out of here.”
According to Crunchbase data, investors poured $42.8 billion into startup funding rounds across all of Asia in the second quarter of 2026—the highest quarterly total in over three years. In Grimeland’s telling, several factors make Asia an appealing home for startups: a rapidly growing electricity grid, and an abundance of advanced chips and AI engineering talent.
“If you look at global power production, there’s four times more power being generated and built in Asia per year than in Europe and the U.S. combined,” he explained. “Most of that is in China, but [it’s happening] in the rest of Asia as well… the cost of power has gone down drastically compared to what you can access in the U.S..”
Asia, too, is leading in the physical AI realm. “All the leading companies in that space are here,” Grimeland said. “There’s very, very few autonomous vehicles on the streets in the U.S…. [but there’s] one company in China that has more autonomous vehicles on the streets than the rest of the world combined.”
Uneven growth
Yet, the allocation of venture funding remains hugely uneven within Asia. Thus far in 2026, 68.1%—or $96.1 billion of $141 billion—of VC funds entering Asia flowed into China, mainly to AI startups such as DeepSeek, Moonshot AI and StepFun, according to Dealroom data. By contrast, only $10.7 billion of venture funding went to Southeast Asia during the first nine months of the year.
“I get this question all the time: “What kinds of AI deals are you seeing in the Philippines?”” said Franco Varona, managing partner at Foxmont Capital Partners, a Philippines-based early growth fund. “[But] we don’t have the infrastructure for an LLM developer. We don’t even have the infrastructure for AI apps to be developed in the Philippines.”
Varona, a Canada-born Filipino, argued that this environment creates different investment opportunities. “In developed markets, you can already benefit from the infrastructure which has been developed, and you can invest in innovators, because those innovators have everything around them that can help them out,” Varona said. “[But] when we think about investing in an emerging market like the Philippines, we think about it as investing in the infrastructure itself.”
To date, Foxmont has launched several themed funds, including one on digitization in the Philippines, and another focused on accessibility and affordability for Filipino consumers.
The unique corporate dynamic in Asia has also pushed the region’s long-running venture firms to launch new funding models. Singapore-headquartered VC firm Granite Asia’s private credit fund Libra Hybrid, for example, combines the characteristics of both debt and equity into a single financial instrument.
“A lot of businesses [in Asia] are family owned or part of conglomerates,” said Ming Eng, Granite Asia’s managing partner. “They may not be interested in dilution or going for an IPO at any point in time… but they still need strategic capital to help them grow, and that’s where we see a lot of opportunities to help founders and companies, [by] having a different form of capital other than [pure] equity.”
All three panelists remained bullish on Asia’s VC scene, despite recent geopolitical headwinds. “We are going into a world now where the balance of innovation is clearly shifting,” concluded Grimeland of Antler. “There’s a real chance that more than the majority of the most exciting and innovative companies in [the AI] space will have been built out of Asia, and that has never happened before.”