Global Money, Local Bets: Why Emerging Markets Are Drawing Early-Stage Capital in 2025

By Nabeel Shariff, Founding Partner at One Degree

If you've been tracking the currents of global venture capital in 2025, you've probably noticed something big brewing outside the typical startup powerhouses. From Lagos to Lima, Jakarta to Jaipur, the winds of early-stage capital are shifting and they’re blowing straight into emerging markets. It’s no longer a surprise to see U.S. LPs backing a Nigerian fintech or a Singaporean deep tech accelerator supporting founders from Vietnam.

What’s driving this change? A combination of macroeconomic opportunity, shifting risk tolerance, and the undeniable talent surge happening in these regions. Early-stage capital is increasingly global in origin, but it’s placing bets that are distinctly local.

Why Investors Are Paying Attention

Emerging markets are having a moment. According to recent data, EM equities have already outperformed many developed counterparts this year, with projected earnings growth around 17%, nearly double that of some Western markets. And yet, valuations remain modest, meaning capital can go further without diluting founders into oblivion. For investors seeking alpha, that’s a compelling combo.

On top of that, large-scale macro diversification is making more sense than ever. LPs are realizing that being overweight in U.S. or European funds limits long-term upside and creates vulnerabilities tied to single-market economic shifts. Emerging markets offer a hedge and, increasingly, a leap.

But it’s not just about numbers. There’s a deeper sense that innovation isn’t confined to Silicon Valley anymore. From AI in Kenya to agri-tech in Colombia, local entrepreneurs are building companies uniquely tailored to the gaps in their ecosystems. They're solving massive, underserved problems with global potential.

Invest in Bogota are helping put that spotlight on Latin America. Their recent presence at South Summit Madrid served as a powerful showcase of Colombia's dynamic startup scene, highlighting sectors from digital services to life sciences and demonstrating just how far ecosystems like Bogotá have come in producing talent, traction, and scalable ideas. When cities show up on global stages, capital tends to follow.

The Opportunity in Sectors That Matter

Spend five minutes reviewing pitch decks in Jakarta or Nairobi, and a pattern emerges: these startups aren't chasing buzzwords, they’re solving real, immediate problems. Financial inclusion. Access to healthcare. Clean energy. Logistics infrastructure. They're doing the hard stuff, and they’re doing it well.

Take fintech. In regions where traditional banks can’t serve large swaths of the population, digital wallets and micro-lending platforms are changing lives and driving adoption at scale. In Latin America, funding for fintech startups has surged, with investors flocking to platforms like Ualá in Argentina or Clip in Mexico.

Climate-tech is also seeing massive traction. From rooftop solar financing in India to carbon offset platforms in Ghana, these startups combine environmental impact with viable, scalable business models. With the clean energy transition accelerating, investors see these as not just good causes, but smart bets.

And then there’s deep tech. While often associated with the West, AI research hubs are springing up in Brazil, Indonesia, and Eastern Europe, tackling everything from precision agriculture to low-bandwidth health diagnostics.

These aren’t vanity plays. They’re local solutions with global relevance.

LPs Are No Longer Sitting on the Sidelines

For a long time, the dominant narrative was that emerging markets were too risky, too opaque, too unstable. That’s changing. In 2025, Limited Partners are showing more confidence in early-stage funds focused on emerging regions. Why? Because they’re realizing that the risk-reward profile is shifting in their favor.

A recent McKinsey report noted that LPs expect private markets to outperform public ones in the next decade. But they’re also becoming more tactical: preferring co-investment opportunities, secondary markets, and GP teams with boots on the ground.

Crucially, they’re looking for proof, not just promise. This means startups that demonstrate real traction, unit economics, and partnerships. A pilot with a telco or a letter of intent from a health ministry goes much further than a pitch deck alone.

What Founders Should Know

If you're building in an emerging market, the playbook is changing. It’s no longer about trying to mimic Silicon Valley. It’s about leaning into what makes your ecosystem unique and proving that you can scale within it.

Investors want clarity. They want founders who can speak the language of both local nuance and global scalability. Show them how your product is solving a structural inefficiency and why your team is best positioned to win. If you’ve locked in a strategic partner or proven demand even better.

Equally important is resilience. Emerging markets come with currency swings, regulatory hiccups, and uneven infrastructure. If you can show that your business model survives those bumps, you’ll stand out.

And remember: local doesn’t mean small. It means relevant. The best emerging market startups don’t just survive, they shape the next generation of middle-class infrastructure. Think of fintechs enabling gig workers, or climate-tech reducing diesel dependence in rural areas.

What This Means for Angel Investors

For angels, this is a golden window. You can now get in early on companies with massive upside, often with lower check sizes and better entry valuations than in over-heated Western markets.

But success in these markets demands a different mindset. Due diligence can’t rely on Crunchbase alone. You need to build trusted networks, understand local business culture, and be ready to support founders navigating complex landscapes. It’s not always smooth, but it’s deeply rewarding.

Co-investing with regional funds or accelerators is a smart way in. And don't overlook alternative instruments like venture debt or hybrid rounds, both of which are gaining traction across Latin America and Southeast Asia.

The Regions to Watch

Latin America

Startup funding in the region jumped 26% in 2024, rebounding from previous contractions. Infrastructure and fintech are leading the charge, and secondary markets are becoming more liquid, giving founders and early investors real exit paths.

India

India saw $43B in private investment last year, with sectors like renewable energy and EV infrastructure taking the spotlight. Combine this with strong governmental support, and you get a dynamic environment for capital-efficient growth.

Africa & MENA

LeapFrog and other funds have made major bets on solar and mobile health. Meanwhile, UAE-based investors are expanding their footprint across North Africa, making MENA a vibrant corridor for early-stage activity.

CEE & Southeast Asia

Despite a funding dip, Central and Eastern Europe remains resilient. In Southeast Asia, Singapore continues to anchor deep-tech investment, especially in sectors like AI and biotech.

Final Thoughts

Global money is chasing local traction, and emerging markets are offering both in abundance. For founders, this means opportunity, but also responsibility. Build with discipline, validate with partners and frame your story not just for your local market, but for investors watching from Dubai, Toronto, and San Francisco.

For investors, now is the time to lean in. The next wave of unicorns won't just come from the Bay Area or Berlin. They'll come from Bandung, Baku, and Buenos Aires. The question isn't "Why emerging markets?" anymore. It’s "How soon can I get in?"

Interested in backing bold founders in emerging markets or gaining early access to breakout startups? Join us at One Degree. We connect angel investors with high-potential opportunities across the globe and support founders building where it matters most.

🌍 Learn more and get involved at www.onedegree.vc