Hello reader, It wasn't too long ago when VCs in Southeast Asia were straying from tech bets in the region by investing in D2C brands for products ranging from activewear to cosmetics. Even coffee chains were all the rage, with large VC firms having at least one beverage brand in their portfolio. But when AI exploded into the scene, VCs shifted their attention. In the process, some industries that were previously investor darlings have fallen out of favor. Capital raised by consumer startups has dropped from a high of US$6 billion in 2022 to US$580 million as of the first half of 2026, data from Tracxn shows. In today's Top Story, I dive into how consumer startups are adjusting their business models amid this new funding environment, and what VCs are now looking for before cutting a check for new players in the sector. For many, Southeast Asia remains a ripe environment for consumer plays. After all, it's home to emerging economies with growing middle-class segments and young populations. But now more than ever, consumer startups need to prove why they're worthy of the VC money they seek. Elyssa Lopez, journalist | 
