2024 has been a massive year for the investment world, with trends like AI, private credit, and blockchain taking centre stage. As we look forward to 2025, these themes are expected to keep growing, with these shifts offering new opportunities or challenges that Aura Group continue to keep an eye on.
Artificial Intelligence
Artificial intelligence continues to be the driving force behind major technological innovation, and it’s not just about robots or self-driving cars anymore. In 2025, AI will continue to expand across sectors like finance, healthcare, and even agriculture. For Australia and Southeast Asia, the role of AI will be crucial in boosting productivity and innovation.
In Australia, AI adoption is already transforming industries, from advanced manufacturing to agriculture. Companies like Canva and Atlassian have shown how AI can be integrated into business operations, improving efficiencies. In Southeast Asia, AI startups are growing rapidly, with companies like Grab leveraging machine learning for ride-hailing and food delivery optimization.
However, the real opportunity lies in AI-powered solutions that can tackle regional challenges. For example, AI can help improve drug discovery, personalised medicine, precision agriculture or crop optimisation. AI has been a big focus for Aura Ventures in 2024 and will continue to be a focus in 2025.
Private Credit
Private credit is gaining traction as an alternative to traditional bank lending, especially in a world where banks are tightening standards. With Basel III regulations, raising the cost of capital for banks, especially for small and medium-sized enterprises (SMEs), private credit is becoming more attractive for investors seeking higher yields and businesses in need of financing.
However, the private credit market in Southeast Asia has its challenges. The region faces greater uncertainty around enforcement laws, which can make it difficult to recover investments if defaults occur. Countries like Indonesia, Vietnam, and the Philippines have different legal frameworks that can complicate the resolution of credit disputes, making the region riskier for investors looking to deploy capital into private lending.
In contrast, Australia’s private credit sector is booming, with the growth of non-bank lenders filling the gap left by traditional banks. With growth comes more dangerous minefields of options for investors to navigate and regulatory clouds are looming. The Australian Securities and Investments Commission (ASIC) and other regulators are considering stricter rules to ensure transparency and protect investors, which could create headwinds for the growth of private credit funds.
Aura Private Credit marked its seventh year in the industry with an impressive track record. This is a testament to the team’s capability and methodical approach to navigate opportunities and challenges well, including recent investments in performing better analytics to drive greater transparency.
Blockchain
Blockchain and cryptocurrency are still in their adolescence in Asia, but they are growing at an impressive rate especially after the spectacular bull run in December 2024, with Bitcoin reaching the USD$100k milestone.
Countries like Singapore are leading the way with progressive regulations, encouraging blockchain adoption in financial services, while markets like Indonesia and Thailand are experimenting with digital assets to improve financial inclusion.
In Australia, the digital asset sector is also experiencing growth, with increased institutional adoption and developments like the launch of Bitcoin ETFs and Ethereum ETFs this year.
legacy.
Aura Group’s digital asset arm BetterX grew at an incredible rate in 2024, surpassing A$22 million in assets and reaching profitability.
However, the regulatory environment remains one of the biggest concerns for blockchain and cryptocurrency investments. Australia, too, is grappling with the rise of digital assets. While the country has been relatively open to blockchain innovation, regulatory clouds are forming as both the government and financial regulators work to define the space. Recent enforcement actions against major crypto exchanges have made it clear that Australia is keen on maintaining a tightly regulated digital asset market. The uncertainty around regulatory clarity is making many institutional investors hesitant to dive into the Australian crypto market, despite its potential.
Looking Ahead
As we move into 2025, the key trends in AI, private credit, and blockchain/cryptocurrency are expected to continue to have significant impacts on investment strategies in both Southeast Asia and Australia. While each sector faces its own set of challenges, the opportunities are immense for those who can navigate the complexities of regulatory environments and technological innovations.
In AI, the demand for solutions that improve efficiency, reduce costs, and drive innovation will continue to grow. For private credit, the demand for alternative lending solutions will increase, especially as traditional banks struggle with the cost of capital and regulatory pressures. And in the world of blockchain and cryptocurrency, while regulatory uncertainty remains a concern, the potential for decentralized finance and tokenization of assets could open up new investment avenues.
Thank you for all your support in 2024, we wish you an incredible holiday season and new year. We look forward to exploring these themes with you in 2025.
