SINGAPORE (July 31): The era of cheap capital and growth at any price was over for Southeast Asian start-ups. With funding harder to secure, exits scarce and the geopolitical environment more fractured, start-ups were being pushed to prove they could generate sustainable returns, defend their markets and withstand shocks.
That was the broad message from the opening day of the Asean Conference 2026, the Singapore Business Federation’s signature annual event, which runs at Resorts World Sentosa from July 30 to 31.
During the session entitled “The venture capital perspective: Investing in uncertain times”, Willson Cuaca, co-founder and managing partner of East Ventures, said the world had shifted away from the era of “cheap money” since March 2022, when the US Federal Reserve started hiking interest rates drastically over a short period.
He said sustainable unit economics now had to carry the business, particularly as exits and public listings for start-ups were harder to come by. Start-up founders could no longer assume that one funding round would finance their growth until the next.
Theodora Lai, co-founder and partner at Moringa Ventures and a principal at Tembusu Partners, said the repricing of capital had not caused investors to retreat from risk, but had made them more selective about the risks they took.
“Venture capital, it’s all about taking risks. But what has changed is that we’ve become more precise with what risks we are taking.”
Lai said that precision was particularly important in the age of artificial intelligence (AI), where an offering could be copied almost as quickly as it was built. She looked for companies with a genuine technical edge rooted in proprietary data and years of domain knowledge, as less defensible products risked being overtaken by better-funded competitors.
“Building a thin application layer over widely available foundational models, it’s not going to cut it,” she said.
However, Singapore Minister for Law and Second Minister for Home Affairs Edwin Tong said AI was no substitute for business judgement, even as he described it as “the technology disruptor of our generation”.
He said AI could sharpen human work but could not replace the judgement and instinct developed through years of experience. “All of that can be assisted by AI, but really should be fronted by the human person,” he said.
Shifting sentiment on climate investing
Meanwhile, Marie Cheong, founding partner of climate venture builder and investment firm 100×100, candidly shared that investor sentiment on climate investing was different today from what it was just a few years ago.
When she launched her first vehicle in 2021, Cheong said, taking action on climate change had been “very sexy”. “It’s very unsexy right now,” she said.
Cheong said the businesses that survived that shift were those that did not force investors or customers to choose between environmental impact and commercial returns. “There should never be a trade-off between making money or your unit economics and your carbon impact,” she said.
Ho Kwon Ping, founder and executive chairman of Banyan Group, added that financial discipline alone was not enough to navigate a fractured world. Companies needed clear principles to steer them through changes in investor sentiment, sanctions and political pressure. In such an environment, Ho said, companies had to double down on what they stood for.
Banyan had put that principle into practice by developing its own version of a know-your-customer rule. The group published the criteria governing which companies and individuals it would not deal with, helping it maintain a consistent position as the geopolitical climate shifted.
“You stick to your guns, otherwise you’re going to be like a ship totally lost, not even knowing which direction you’re going,” he said.
Ho applied the same test of conviction to corporate sustainability. He argued that some financial institutions and investors were unwinding their pledges faster than Washington required.
On sustainability policies, his advice was for companies to determine what it meant to them, then hold that position regardless of the prevailing political label.
His caution also extended to entrepreneurs, as he said founders already occupied a risky position simply by owning a business, so their priority should be to reduce risk rather than pursue it.
“Let’s not romanticise risk… Always think about how much you can afford to lose, because that’s what brings you back to reality,” he said.
Asean remains an exciting region, but still lacks cohesion
Tong remained optimistic about Southeast Asia despite the more demanding operating environment. He called Asean “perhaps the most exciting region in the world today”, with 660 million people, 65% of whom were aged 35 or younger.
He warned, however, that a more protectionist climate could turn companies inward. The temptation, he said, “is to be closed, is to be very introspective and to just deal with partners on a bilateral basis”.
Tong said companies should instead deepen their networks and position their assets to remain “as open as possible”.
Ho, however, was less optimistic about the cohesion of the Asean bloc. He pointed to limited genuine intra-regional investment, arguing that much of what was classified as Asean capital came from multinationals based in Singapore or Chinese companies operating through the region, rather than home-grown investors.
Launched in 2015, the Asean Conference is an annual signature event organised by the Singapore Business Federation and jointly supported by United Overseas Bank Ltd, Rajah & Tann LLP and RSM.
Celebrating its 10th edition under the theme “Asean’s Future in a Fractured World”, the conference brought together founders, investors and policymakers who broadly agreed that the old expansion playbook no longer worked.