Introduction
New patterns are emerging in how startups across the Asia-Pacific and Middle East region (APAC and ME) are managing their equity and structuring their teams. The market has moved past the expansion-focused mindset of 2022. As of Q1 2025, many companies are taking more conservative approaches to both hiring and equity distribution.
This report analyzes data from private companies that use Carta and are headquartered in APAC and ME. For some data points, this larger region is broken down into three subregions: Australia and New Zealand (ANZ), East and Southeast Asia (ESEA), and Middle East and South Asia (MESA).
Carta’s data shows a stark reversal in workforce movement across APAC and ME. Between 2019 and 2022, the rate of hiring in the region far outpaced the rate of job departures. The annual count of new hires increased by 423% over that span, while departures were up 115%. Since then, hiring has slowed, while departures—including both voluntary exits and layoffs—have continued to become more common. In 2024, annual hiring activity was up 131% compared to 2019, while the frequency of departures is up more than 400%.
In some ways, startups in APAC and ME and those in the United States approach employee equity similarly. The median initial grant size given to employees in APAC and ME has declined more than 30% since 2021, mirroring trends in the U.S., where grants have also shrunk substantially in recent years.
In other ways, startups in APAC and ME have distinct patterns. While the median employee stock option pool (ESOP) size in the U.S. is around 18% for startups at Series C and beyond, the corresponding figure for APAC and ME is 12%.
Key takeaways
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Hiring contraction continues: The era of aggressive hiring has ended across APAC and ME, with the hire-to-departure ratio falling below 2020 levels. This reflects a fundamental shift in how companies approach talent management.
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ESOPs level off as companies grow: ESOPs in APAC and ME expand from 7% of fully diluted equity at the pre-seed stage to 11% at seed, but remain in the 11-13% range at later fundraising stages. ANZ startups have larger ESOPs than those in ESEA or MESA.
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Option exercise rates are low: Only 28% of options whose strike price was lower than the fair market value (FMV) at time of exercise were exercised by employees in 2024. The exercise rate has fallen tremendously from a recent high of 60% in 2021.
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Vesting schedules are standardized: Like in the U.S., the vast majority of employee equity awards take the form of a four-year grant with a one-year cliff followed by monthly vesting.
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Some advisors and employees receive larger grants: Board members and pre-seed advisors in APAC and ME tend to receive even more equity than early employees. Companies offer the largest awards to employees in engineering, marketing, and customer success.
Employee headcount
The median pre-seed company in APAC and ME has four employees, while the median seed company has eight. This relatively compact team size reflects the focused product development and initial market validation efforts characteristic of emerging startups.
From Series A and up, companies start to expand rapidly, with median headcount more than doubling in size from the seed stage. Companies at Series C and beyond, which have typically validated their market fit, have a median of 81 employees and average of over 200. The high average value reflects a small number of very large companies, some of which are at much later stages than Series C.
Compared to those in the United States, the median count of employees is higher for startups in APAC and ME at every stage. The median Series B startup in APAC and ME has 53 employees, approaching double the corresponding figure for the U.S. The smaller team sizes in the U.S. indicate that founders there are more conservative in their approach to talent acquisition, and they may be further along in the adoption of artificial intelligence and other tech tools that enable scaling up with leaner teams.
Across pre-seed and seed, median headcount is higher in SaaS than in any other industry, and by a wide margin. The median SaaS company at pre-seed or seed has 11 employees, more than five times the median for biotech and pharma companies.
This stark difference illustrates how early-stage hiring patterns are subject to industry-specific dynamics. Our data suggests shorter R&D cycles enable industries such as SaaS to increase headcount at earlier stages, compared to capital-intensive sectors like biotech and pharma, which maintain smaller teams focused on specialized research until later funding rounds.
Employee movement
The ratio of new hires to departures from companies in APAC and ME continued to decline in 2024, falling to its lowest point in the past six years. There were only two hires for every departure in 2024, compared to a ratio of more than 10 hires for every departure in 2021 and 2022. This decreasing trend follows global workforce movement patterns, highlighting the startup industry's growing hesitation to expand headcount.
The cumulative percentage change in new hires by APAC and ME companies relative to 2019 peaked in 2022 and has fallen dramatically since then. The percentage change in departures, meanwhile, keeps going up. The number of departures in 2024 was more than 400% higher than it was in 2019, while the number of new hires was 131% higher.
The number of departures has increased for three consecutive years, likely related to the post-downturn layoffs across all industries as companies have adjusted to changing economic conditions and investor expectations. This trend mirrors the U.S. landscape, where the number of hires has been in decline since 2022.
Employee stock option pools (ESOPs) and dilution
The median fully diluted percentage of company equity allocated to ESOPs in APAC and ME tends to level off after the seed stage. While median ESOP allocation increases steeply from 7.3% at the pre-seed stage to 11.2% at seed, it does not continue to grow significantly in later stages and remains in the 11%-13% range.
In contrast, ESOPs for startups in the U.S. continue to grow across stages. Although U.S. startups allocate a smaller percentage of equity for employees at the pre-seed stage, they significantly expand the pool at the seed stage and continue expanding it afterwards. While ESOPs in APAC and ME hover at 12.3% for Series C+ companies, that figure is 17.6% in the U.S. Later-stage companies in APAC and ME may be incentivizing and compensating employees in other ways than via increased equity compensation.
The amount of fully diluted equity dedicated to ESOPs in APAC and ME differs widely across industries. While the median company in adtech or edtech devotes more than 12% of company equity to their ESOP, the median ESOP in healthtech comprises less than 7% of fully diluted equity.
As a percentage of fully diluted equity, ESOPs in Australia and New Zealand (ANZ) tend to be slightly larger than ESOPs in East and Southeast Asia (ESEA) or the Middle East and South Asia (MESA). ESOPs in all of these regions tend to be smaller than in the U.S., where the standard pool size is 14-20%.
Given the competitive tech talent markets in both Australia and New Zealand, where sustained demand for tech workers has outpaced supply, larger ESOPs may function as leverage to attract and retain specialists. Furthermore, ESOPs in Australia qualify for tax concessions, which can make them a cost-efficient option for startups.
From the seed stage to Series B, existing shareholders in APAC and ME retain more ownership than in the U.S. For example, the median dilution—or percentage of equity sold—in primary Series A rounds is 18.2% for APAC and ME startups but 20.8% for U.S. startups.
The range between the 25th and 75th percentiles of dilution at Series B and Series C is wider for startups in the U.S. than in APAC and ME. This suggests that APAC and ME startups have a higher degree of standardization of deal terms at those later stages, while those in the U.S. have more variation.
Employee equity grants
Across most job functions, the typical equity award granted to entry- and mid-level hires is between 0.01% and 0.02% of all company equity. Employees in engineering, marketing, and customer success have a comparable median of 0.017%. At the 75th percentile of compensation, equity packages are significantly higher in engineering than these other functions, reflecting the fact that engineering forms the core foundation of many startups' organizational structures.
The size of the gap between the 50th and 75th percentiles of equity granted varies significantly across functions. Engineering, sales, and product exhibit the widest spreads, with hires at the 75th percentile receiving substantially higher equity than their median counterparts.
Engineering and product roles at APAC and ME companies receive less equity than at U.S. companies, while other functions such as marketing and customer success tend to receive more generous packages. Startups in APAC and ME appear to grant equity more uniformly across roles than in the U.S., where companies offer an equity premium to engineering and product roles.
The size of the median initial equity grant issued to new hires in APAC and ME has declined by 32% since 2021. Over the past two years, the market seems to have settled into a new normal—at least for now. This significant reduction represents a fundamental shift in compensation strategy across the ecosystem, likely reflecting both market conditions and changing perspectives on equity value following multiple years of valuation adjustments throughout the region.
Initial employee equity grants in APAC and ME follow a distinct tier-based structure. At the median startup, the first three hires receive between 0.18% and 0.39% of fully diluted equity—approximately 3x the allocation given to subsequent employees. Equity grants for hires No. 4 through No. 10 typically receive between 0.05% to 0.10% of fully diluted equity in their initial grants.
This structured approach to equity allocation demonstrates how startups strategically concentrate ownership among critical early team members, while establishing more conservative but still meaningful equity incentives for later hires.When viewed alongside U.S. data, this pattern of equity distribution across the first 10 hires is roughly consistent between regions, though U.S. startups typically grant approximately twice the equity percentage at each hire number compared to their APAC counterparts.
The percentage of vested options exercised by employees of APAC and ME startups has declined since 2021. That trend holds regardless of the relationship between the fair market value and exercise price of the option, though options that have a fair market value above the strike price are about twice as likely to be exercised as those that do not.
The fact that employees in the APAC and ME startup ecosystem are exercising options less frequently, even when the exercise price is lower than the FMV, provides critical insight into their decision-making process. This trend may be the result of several factors. Like the declining size of equity grants, lower exercise rates could indicate that equity compensation is becoming less appealing to APAC & ME employees.
A closer look reveals a clear split in how employees across regions view equity. In the MESA region, employees exercised just 14.5% of options that were due to expire in 2024 and whose fair market value exceeded the strike price. That figure was higher in ESEA, at 22.8%.
Employees in the ANZ region had an exercise rate of 51.8%, more than double that of ESEA and more than three times the MESA rate. The ANZ rate is even higher than the 32.2% rate observed in the United States in Q4 2024, highlighting regional variation in option exercise behavior. A combination of macroeconomic market conditions and personal finance norms are likely influencing these differences.
Vesting schedules
Employee equity grants usually vest over a predetermined time period. More than 75% of employee grants in APAC and ME that started vesting between 2020 and 2024 have a four-year vesting period. Relatively few companies set two-, three-, or five-year vesting periods. A small minority also offer immediate grants that fully vest upon issuance.
When it comes to the frequency of vesting, more than three-quarters of all employee equity grants have a monthly cadence. Quarterly and annual vesting are also fairly common, at approximately 12% each. For growing tech hubs in APAC and ME, the steady stream of ownership offered to employees via monthly vesting may serve as an incentive for talent acquisition and retention.
Over 80% of employee equity grants issued by APAC and ME companies on Carta have a cliff. In the vast majority of cases, that cliff is one year long, at which point 25% of an employee’s grant would vest.
While most founders in APAC and ME are conscious of ensuring long-term commitment from employees and protecting their companies from dilution, it is noteworthy that nearly 20% of grants issued from 2020 through 2024 had no cliff. This could be the result of startups leaning towards greater flexibility in equity distribution as part of their retention strategies.
APAC and ME startups are consistent in their equity vesting practices, with 67% of grants following a four-year vesting schedule with a one-year cliff. This structure—where 25% of equity vests after the first year and the remaining 75% vests monthly thereafter—has become the regional norm as well as the global standard. The most common vesting frequency in these cases is monthly (representing 55% of the sample,) but quarterly (9%) and annual (3%) also exist.
Advisor and board member equity
Founders often struggle with deciding how much equity they should allocate to advisors. Early advisors often take on more risk when joining a company at pre-seed, which can sometimes result in more equity. The median grant issued to a pre-seed advisor in APAC and ME comprises 0.624% of fully diluted equity, while the median advisor at Series A and beyond receives 0.041% of equity, a pronounced drop.
Equity distributions are wide for pre-seed advisors, with grants at the 75th percentile five times larger than those at the 25th percentile. As companies gain market traction and their risk decreases, both the distribution and median value for later-joining advisors become much smaller.
Looking at board members across all stages, the median equity grant falls at 0.46% of total equity. That’s lower than the median equity for advisors who join at pre-seed, but higher than later-joining advisors. The distribution of board-member equity is very wide, with the 75th percentile receiving approximately 4.5x more than the 25th percentile.
Methodology
Carta helps more than 45,000 primarily venture-backed companies and 2.4 million security holders manage over $3.0 trillion in equity. We share insights from this unmatched dataset about the private markets and venture ecosystem to help founders, employees, and investors make informed decisions and understand market conditions.
Overview
This study uses an aggregated and anonymized sample of Carta customer data, encompassing companies headquartered in the Asia-Pacific and Middle East regions. Companies that have contractually requested that we not use their data in anonymized and aggregated studies are not included in this analysis.
The data presented in this report represents a snapshot as of March 2025. Historical data may change in future studies because there is typically an administrative lag between the time a transaction took place and when it is recorded in Carta. In addition, new companies signing up for Carta’s services will increase historical data available for the report.
APAC and ME subregions
The scope of this report includes companies on Carta that are headquartered in the Asia-Pacific and Middle East. For some data points, this larger region is broken down into three subregions: Australia and New Zealand (ANZ), East and Southeast Asia (ESEA), and Middle East and South Asia (MESA).
Company stages
Companies that have not raised a priced equity round are classified as “pre-seed.” Otherwise, the fundraising stage or “series” (e.g. Series A) is taken from the share class name in their applicable certificate or articles of incorporation. Primary rounds are defined as the first equity round within a series.
Employee headcount
Employees are included if they work for a startup headquartered in the Asia-Pacific or Middle East regions. All data on employees only covers those who hold an equity stake in their company.
Equity
All equity values, including employee stock option pools and individual grants, are expressed as a percentage of fully diluted company shares. Data on individual grant sizes and vesting schedules only cover the initial equity grants issued to new hires.
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. ©2025 Carta. All rights reserved. Reproduction prohibited.
