DBS and Granite Asia Launch $110 Million AI Fund as Southeast Asia Scrambles for Startup Capital

DBS and Granite Asia Launch $110 Million AI Fund as Southeast Asia Scrambles for Startup Capital

DBS Group Holdings, Southeast Asia's largest bank, is partnering with venture capital firm Granite Asia to launch a $110 million fund targeting AI companies preparing for public offerings—a move that underscores the widening capital gap between Asian startups and their Silicon Valley counterparts.

The three-year partnership, announced Saturday, will offer the AI-focused IPO fund exclusively to DBS's high-net-worth clients, giving them "early access" to what the companies describe as "high-growth AI-driven companies in the region." The fund has already attracted participation from investors in Southeast Asia, South Asia, and Europe, according to a joint statement.

The collaboration reflects mounting frustration among Asia's tech ecosystem about the region's chronic underfunding compared to the U.S. market. "The U.S. is amply funded, if not overfunded," Jenny Lee, senior managing partner at Granite Asia, told Fortune. "The rest of Asia is under invested [...] and Asia is not small."

The funding disparity is stark. While Chinese AI startup Moonshot—developer of the open-source Kimi model—raised $500 million earlier this year according to local media, Anthropic secured $30 billion this month for its Claude model. That sixty-fold difference illustrates the challenge facing Asian AI companies competing for talent and compute resources in a global race.

Southeast Asia's venture capital market has contracted in recent years as investors pulled back amid macroeconomic headwinds and disappointing returns from earlier bets. Traditional banks have proven reluctant to extend loans to cash-burning startups in their growth phases, DBS CEO Tan Su Shan noted. The U.S. accounted for 10 of the 11 largest venture deals in the fourth quarter of 2025, according to KPMG data.

The DBS-Granite partnership grew from a conversation between Tan and Lee at a conference in Qatar in 2025, where both finance veterans—who have known each other for decades—discussed Asia's tech sector. "We were bemoaning the fact that there was so much talent, but not enough capital to fund these guys," Tan recalled. "Jenny and I meet in all the strangest places—corridors, conferences, toilets," she quipped.

For DBS, the fund represents a strategic bet on building early relationships with companies that could become significant banking clients if they reach IPO stage. The bank is effectively using its wealth management platform to create a bridge between capital-starved startups and investors willing to take pre-IPO risk.

The companies characterized the partnership as "first-of-its-kind," though the structure—a bank's private wealth arm distributing a venture fund—suggests other Asian financial institutions may follow suit if the model proves successful. Whether $110 million can meaningfully narrow the funding gap remains an open question, particularly as U.S. AI companies continue raising at unprecedented scale.