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Startups in Asia-Pacific and the Middle East (APAC and ME) are shifting away from the aggressive expansion strategies of the past. New data from private companies on the Carta fund administration platform shows a more cautious approach to hiring and equity distribution, marking a new phase in the region\u2019s startup evolution.<\/p>\n
Between 2019 and 2022, startup hiring across APAC and ME surged, with new hires growing by\u00a0423 per cent\u2014far outpacing the\u00a0115 per cent\u00a0increase in departures. However, this trend has now reversed.<\/p>\n
In 2024, hiring activity remained 131 per cent above 2019 levels, but departures (including resignations and layoffs) rose by\u00a0over 400 per cent. The ratio of hires to departures dropped to\u00a02:1, down from\u00a010:1\u00a0in 2021\u20132022\u2014reflecting a significant contraction in workforce expansion.<\/p>\n
Also Read: \u2018In innovation, diversity is not just beneficial but essential\u2019: Tan Lee Chew of ST Engineering<\/a><\/strong><\/p>\n This trend mirrors global patterns as companies respond to economic uncertainty and recalibrated investor expectations. For the third year in a row, departures have increased, a sign that the post-2022 market correction continues to affect headcount decisions.<\/p>\n Despite the slowdown, startups in APAC and ME tend to run\u00a0larger teams\u00a0than their US counterparts. A\u00a0Series B company in the region has a\u00a0median headcount of 53, nearly double that of the US.<\/p>\n At earlier stages, APAC and ME startups still staff more heavily:<\/p>\n This may suggest greater conservatism among US startups or better integration of automation and AI tools that support scaling with leaner teams.<\/p>\n Hiring patterns differ significantly across industries. SaaS companies, for example, employ a\u00a0median of 11 staff\u00a0at pre-seed or seed\u2014more than five times\u00a0that of biotech and pharma startups. These variations reflect the shorter R&D cycles in software compared to capital-heavy sectors like life sciences.<\/p>\n Since 2021, the\u00a0median initial equity grant size\u00a0in APAC and ME has dropped by over\u00a030 per cent, echoing a similar trend in the US. The market appears to have settled into a new normal after years of inflated valuations and compensation packages.<\/p>\n Early hires still receive a premium:<\/p>\n While the tiered structure remains consistent with the US, APAC and ME startups generally\u00a0grant less equity per hire\u2014about half as much compared to US firms.<\/p>\n Entry- and mid-level employees across most functions typically receive\u00a00.01\u20130.02 per cent\u00a0of total equity. The median grant in engineering, marketing, and customer success is about\u00a00.017 per cent.<\/p>\n Also Read: \u2018Talents tend to overlook imperfect company cultures if salary meets their expectations\u2019<\/a><\/strong><\/p>\n At the higher end (75th percentile), engineering roles still command larger equity packages, but the gap is narrower than in the US. In fact, APAC and ME startups distribute equity\u00a0more evenly across job functions, while US startups tend to heavily favor engineering and product roles.<\/p>\n Advisor equity starts high and decreases as startups mature:<\/p>\n Employee Stock Option Pools (ESOPs) in APAC and ME\u00a0increase sharply\u00a0from\u00a07.3 per cent at pre-seed\u00a0to\u00a011.2 per cent at seed but then plateau between\u00a011\u201313 per cent through Series C+.<\/p>\n In contrast,\u00a0US startups continue expanding ESOPs\u00a0at later stages, reaching around\u00a017.6 per cent at Series C+. This suggests APAC and ME companies may be relying less on equity-based incentives as they scale.<\/p>\n Sectoral differences are stark:<\/p>\n Regionally,\u00a0Australia and New Zealand (ANZ)\u00a0startups allocate more to ESOPs than those in\u00a0East and Southeast Asia (ESEA)\u00a0or\u00a0Middle East and South Asia (MESA). Possible drivers include:<\/p>\n Most startups in APAC and ME follow global standards:<\/p>\n From 2020\u20132024, over\u00a080 per cent of equity grants\u00a0on Carta included a cliff. Yet around\u00a020 per cent had no cliff, hinting at growing flexibility to boost retention or adapt to employee expectations.<\/p>\n Monthly vesting remains the dominant structure, used in\u00a055 per cent of grants.<\/p>\n Although equity remains a core compensation tool,\u00a0option exercise rates\u00a0have dropped since 2021\u2014even when the strike price is lower than fair market value (FMV).<\/p>\n Only 28 per cent of eligible options\u00a0were exercised in 2024, down from\u00a060 per cent in 2021. This decline suggests reduced confidence in equity as a wealth-building tool or rising caution among employees amid uncertain exit outcomes.<\/p>\n Option exercise rates vary widely across subregions:<\/p>\n ANZ employees outpace even the\u00a032.2 per cent US average, showing that local tax regimes, personal finance norms, and startup liquidity events may influence exercise decisions.<\/p>\n At Series A, founders in APAC and ME give up\u00a018.2 per cent\u00a0of equity on average, compared to\u00a020.8 per cent\u00a0in the US. This allows local founders to retain greater control moving into Series B.<\/p>\n Also Read: Blockchain engineering salaries in Asia see 5.41% drop: report<\/a><\/strong><\/p>\n At later stages,\u00a0US startups show greater variability\u00a0in dilution, while APAC and ME companies tend to follow more\u00a0standardised deal structures\u2014suggesting more predictable fundraising norms across the region.<\/p>\n The data reflects a\u00a0more disciplined, risk-aware startup culture\u00a0emerging in APAC and ME. Companies are prioritising leaner teams, recalibrating compensation, and standardising equity practices in response to global headwinds and regional realities.<\/p>\n As the ecosystem matures, founders and employees alike are adapting to a post-growth-at-all-costs world\u2014one where equity is still central but wielded with greater precision.<\/p>\n —<\/p>\n Enjoyed this read? Don\u2019t miss out on the next insight. Join our WhatsApp channel<\/a> for real-time drops.<\/p>\n The image was generated using Grok.<\/p>\n The post Fewer hires, smaller equity grants: Carta’s data reveals a startup reset in APAC<\/a> appeared first on e27<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Startups in Asia-Pacific and the Middle East (APAC and ME) are shifting away from the aggressive expansion strategies of the past. New data from private companies on the Carta fund administration platform shows a more cautious approach to hiring and equity distribution, marking a new phase in the region\u2019s startup evolution. Hiring slows, departures rise Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":1019,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-1017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-news"],"_links":{"self":[{"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/posts\/1017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/comments?post=1017"}],"version-history":[{"count":2,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/posts\/1017\/revisions"}],"predecessor-version":[{"id":1020,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/posts\/1017\/revisions\/1020"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/media\/1019"}],"wp:attachment":[{"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/media?parent=1017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/categories?post=1017"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.highschoolhypnotist.com\/index.php\/wp-json\/wp\/v2\/tags?post=1017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Bigger teams than the US\u2014at every stage<\/h2>\n
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Industry matters: SaaS leads, biotech lags<\/h2>\n
Equity grants shrink across the board<\/h2>\n
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Equity more evenly distributed across roles<\/h2>\n
Advisors and Board members still receive generous grants<\/h2>\n
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ESOPs stabilise after seed stage<\/h2>\n
ESOP size varies by industry and geography<\/h2>\n
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Vesting terms: Standardised yet evolving<\/h2>\n
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Option exercise rates decline sharply<\/h2>\n
Regional differences in exercise behaviour<\/h2>\n
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Lower dilution in APAC and ME<\/h2>\n
A more disciplined era<\/h2>\n