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.”
Asia is witnessing a surge in interest from tech and AI entrepreneurs, as highlighted by Magnus Grimeland, founder and CEO of Antler, at the Fortune Southeast Asia 500 Summit in Vietnam on November 3. He noted that while the United States remains a popular destination for building companies, Asia is now emerging as a competitive hub due to several advantageous factors.
According to Crunchbase data, startup funding in Asia reached $42.8 billion in the second quarter of 2026, marking the highest quarterly total in over three years. Grimeland emphasized that Asia’s rapidly expanding electricity grid and a wealth of advanced chips and AI engineering talent contribute to its attractiveness for startups. He pointed out that Asia generates four times more power annually than Europe and the U.S. combined, with a significant portion coming from China, resulting in lower energy costs compared to the U.S.
Moreover, Asia is at the forefront of physical AI development, with leading companies in the autonomous vehicle sector located there. Grimeland noted that one Chinese company operates more autonomous vehicles than the rest of the world combined, highlighting Asia’s prowess in this area.
However, the distribution of venture capital funding across Asia remains uneven. In 2026, 68.1% of the $141 billion in venture capital funds directed toward Asia was allocated to China, primarily benefiting AI startups like DeepSeek and Moonshot AI. In stark contrast, Southeast Asia received only $10.7 billion in funding during the first nine months of the year. This discrepancy raises questions about the region’s infrastructure for AI development.
Franco Varona, managing partner at Foxmont Capital Partners in the Philippines, remarked on the lack of infrastructure necessary for developing AI applications in the country. He noted that emerging markets like the Philippines present unique investment opportunities. In developed markets, investors can capitalize on existing infrastructure and support for innovators. Conversely, in emerging markets, the focus shifts to investing in infrastructure itself to foster growth.
Foxmont has initiated several themed funds, targeting areas such as digitization and consumer accessibility in the Philippines. Varona’s perspective underscores the need for investment in foundational elements that can support the development of AI and tech solutions in less developed markets.
The unique corporate landscape in Asia is also prompting established venture firms to explore new funding models. For instance, Singapore’s Granite Asia has introduced the Libra Hybrid private credit fund, which merges debt and equity characteristics into a single financial instrument. This approach acknowledges that many businesses in Asia are family-owned or part of conglomerates that may resist dilution or public offerings but still require strategic capital for growth.
Ming Eng, managing partner at Granite Asia, explained that this funding model serves as a solution for founders and companies seeking alternatives to traditional equity financing. The demand for innovative funding structures reflects the region’s diverse business dynamics and the necessity for tailored financial solutions.
Despite geopolitical challenges, all panelists expressed optimism about Asia’s venture capital landscape. Grimeland concluded that the balance of innovation is shifting, with the potential for a significant number of groundbreaking AI companies to emerge from Asia. This transformation represents a historical moment, as the region positions itself as a serious contender in the global tech and AI arena.
In summary, Asia’s growing appeal for tech and AI entrepreneurs is fueled by its robust electricity infrastructure, talent pool, and innovative funding models. However, the uneven distribution of venture capital, particularly between China and Southeast Asia, highlights the need for targeted investment in infrastructure and support for startups in emerging markets. As Asia continues to evolve, it stands poised to become a leading player in the global tech landscape, with the potential for more innovative companies to originate from the region than ever before.
