Southeast Asia’s early digital bank pioneers post big losses
Three years on, it is clear that disrupting dominant and profitable incumbents will take time
Welcome back,
Digital banking was highly anticipated when it landed in Southeast Asia. The success of Monzo, Wise, N26 and others in Europe, and the likes of Nubank in South America showed neobanking are ideal for regions with a young population and high internet usage. Southeast Asia is exactly that, but the revolution has been slow so far.
Singapore was first out of the gate with neobanks, but the struggle is tough. Last week, we learned that three of them—Grab’s GXS Bank, MariBank and Trust Bank—posted combined losses of $278 million last year. Singapore’s established three banks, meanwhile, made nearly $20 billion in profit last year.
It’s true that Singapore may not be the ideal market for digital banks to show what they can do, but this early look after three years shows it will be tough to break up highly profitable incumbent players. Thailand, another market with neobanks emerging, may face the same problem. Established banks are even backing digital banking ventures, effectively playing both sides of the field.
Tonik in the Philippines might be an exception. It claims to be on track for profitability by the end of this year.
It's still early days for the digital banking revolution in Southeast Asia, but the journey looks tough.
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Tencent, Sea and Foxconn impress with earnings
A number of top Asian companies filed earnings reports:
Tencent reported a 15% jump in second-quarter revenue to $25.7B driven by gaming sales and wider AI use across its platforms—the company also said it has enough chips in hand to train its AI services
Shopee parent Sea had a good Q2 as revenue jumped 34% to $3.8B—its share price has tripled this year
GoTo posted a 23% net income jump, the company continued to cut costs but it remains unprofitable
Carsome isn’t public but it is gearing up to be so by releasing regular earnings figures among other things—it claimed record profit in Q2 (rival Carro has been linked with a US IPO)
We don’t often cover Foxconn earnings—but the manufacturing giant enjoyed a successful quarter in which its AI service business made more money than Apple-related products for the first time.
That’s testament to Foxconn’s efforts to diversify its income and lessen its reliance on Apple, which itself has been diversifying away from China. Foxconn has built its presence in other parts of the world to follow demand from its biggest customer, but it is also smartly betting on other areas—having Nvidia as a customer puts Foxconn in an ideal position.
Japan’s PayPay set for US IPO to raise $2B
Also notable, Japan’s PayPay reportedly filed for a US IPO that could raise $2 billion and value its business at over $10 billion.
Japanese companies don’t tend to go public overseas
The Japanese IPO market is fairly robust but less suited to venture businesses that are loss-making—its appetite for tech focuses on smaller companies
PayPay was a pioneer of digital payments in Japan, where cash was king for so long
SoftBank is a major backer and its share price jumped on the news
The IPO filing isn’t confirmed but SoftBank has spoken about its desire for a PayPay listing in the US
China
Bad news for Nvidia as China told local firms to avoid using its H20 processors due to security concerns, especially for government or national security work link
US authorities have covertly planted tracking devices in select high-risk shipments of advanced chips to detect illegal diversion to China, according to sources link
US chip-equipment maker Applied Materials is being sued in China by rival Beijing E-Town Semiconductor for alleged trade secret theft link
DeepSeek delayed its new model after failing to train it on Huawei’s Ascend chips, underscoring limits to Beijing’s US tech replacement drive link
Huawei unveiled a software tool to accelerate inference in large AI models, which could reduce China’s reliance on expensive high-bandwidth memory (HBM) chips link
China’s push to make its open-source AI models a global standard is spurring concern in the US, where companies and policymakers fear losing ground—DeepSeek’s R1, Alibaba’s Qwen, and models from Moonshot, Z.ai, and MiniMax have gained traction by offering free and modifiable versions worldwide link
Chinese authorities have rejected OpenAI’s attempt to register the name of its new flagship artificial intelligence model, GPT-5, as a trademark on the mainland link
Apple is testing Douyin Pay as a new payment option on its China App Store—it already offers Alipay, WeChat Pay and China UnionPay link
US memory chip firm Micron starts lay-offs in China as it exits mobile NAND market link
JD.com beat estimates as its food delivery business funneled users into its core e-commerce businesses, but that’s unsustainable and top-performing electronics and appliances units may suffer from tougher economies in China link
Shein sales in the UK, its third-largest market, jumped 33% to reach $2.8B in 2024 link
India
Apple and other companies may be picking India as their new electronics hub, but the country’s growing manufacturing industry remains reliant on China for technical expertise, manufacturing know-how, and operational models—breaking that link will not be easy link
Home services startup Pronto closed an $11M Series A led by General Catalyst and Glade Brook Capital—it closed $2M just months ago and it now claims more than 1,000 daily bookings and $1.5M ARR link
Electric motorcycle startup Ultraviolette raised $21M led by TDK Ventures—the 9-yo startup just entered 10 European markets and it is now looking at Latin America and Southeast Asia link
Fractal Analytics, India’s first AI unicorn, filed for a Mumbai IPO that could raise $560M at a valuation of $3.5B link
OpenAI is now piloting location pricing in India for ChatGPT, starting at 1,999 INR ($23) link
Pixxel, Piersight Space, Satsure Analytics, and Dhruva Space won the bid to develop and operate India’s first fully indigenous commercial earth observation satellite constellation link
Paytm won central bank approval to operate as a payment services provider for online merchants link
India approved four new semiconductor projects under the India Semiconductor Mission, raising the total number of sanctioned chip facilities to ten and projected investments to $1.5B link
Ride-hailing platform Rapido has begun testing food delivery to take on leaders Swiggy and Zomato link
Auto platform Pocket FM is rolling out AI tools to help writers produce episodes faster and tailor stories to user tastes link
Truemeds, the Indian e-pharmacy focused on lower-cost medicine substitutes, raised $85M led by Accel, lifting its valuation to over $400M—that’s 4X from 2 years ago link
AI startup Refold AI, which uses AI agents to plan, build and maintain tech integrations, raised $6.5M link
Arintra, which applies AI to medical coding and paperwork, raised $21M link
Infosys plans to buy a 75% stake in Australian operator Telstra’s cloud services unit for $153M link
Southeast Asia
Grab made an undisclosed investment in WeRide, the pair plan to work together to put robotaxis and autonomous shuttles on roads in Southeast Asia link
Indonesia is reportedly planning to create a “sovereign AI fund” as part of its efforts to turn the country into a regional hub for AI—the fund would be part of the new $900M Danantara Indonesia sovereign wealth fund link
Singaporean chip equipment maker ASMPT is closing its Shenzhen plant, impacting 950 jobs link
HBO Max and Viu will launch Asia Pacific’s first multi-market streaming bundle in late 2025, offering content across Indonesia, Malaysia, the Philippines, Singapore, and Thailand link
Graas.ai raised $9M to bring AI automation to e-commerce selling link
The Philippine central bank gave mobile wallets, payment apps and others 48 hours to remove links to online gambling platforms—finally ending the allowance of online gambling ads in prominent consumer apps link
Malaysian developer Sime Darby Property is seeking up to $714M loans to build a data center for lease to Google link
Chip giant AMD opened an office and engineering facility in Malaysia, the 209,000 square foot facility will support 1,200 employees link
Xiaomi was Southeast Asia’s top smartphone vendor in Q2 for the first time since 2021—shipments jumped 8% to 4.7M units reaching 19% market share ahead of Transsion (18%) and Samsung (17%) link
True, Thailand’s largest operator which recently acquired rival DTAC, is focusing on building out value-add services in AI, cyber security and more, according to its CEO link
Chinese criminal groups in Southeast Asia are laundering scam profits through a scheme called “ghost-tapping,” according to Recorded Future’s Insikt Group—the method involves stealing payment card details via phishing, social engineering, or malware, intercepting one-time passwords, and loading the data onto burner phones link
South Korea
Terra-Luna founder Do Kwon pleaded guilty in New York to conspiracy and wire fraud—he agreed to forfeit over $19M and faces up to 25 years in prison link
Upstage, a little-known South Korean AI startup, says its latest large language model matches top US and Chinese systems, marking the country’s first entry into the global “frontier model” club and boosting its bid to rejoin the race for AI supremacy link
Datumo raised $15.5M from investors including Salesforce to take on Scale AI link
Japan
SoftBank Group plans to sell about $675M in subordinated bonds to capitalise on improved sentiment around its efforts to revive its AI ambitions link
TikTok’s live commerce feature is reportedly off to a slow start in Japan a month after launch, as many companies hesitate to embrace the still-untested marketing channel link
Hong Kong
Iluvatar CoreX, formerly Shanghai Tianshu Zhixin Semiconductor, could raise $300-$400M from a Hong Kong IPO as the stampede to list in the special administrative region of China link
Rest of Asia
Hackers going by Saber and cyb0rg say they breached the computer of a North Korean government hacker linked to the Kimsuky espionage group, leaking the data to nonprofit DDoSecrets link