Ride-hailing firms have taken home the lion's share of investor money for South-east Asia's Internet economy, amid competition in recent years to become the region's first "super app".

Almost 70 per cent of funding from 2016 to the first half of this year went to companies in ride-hailing and e-commerce, the latest e-Conomy report by Google, Temasek and Bain & Company revealed yesterday.

South-east Asia has remained a bright spot despite slowing global growth as well, with funding for Internet firms rising in the first half of this year, even as global venture funding fell 17.5 per cent in the second quarter from a year ago.

However, a funding gap for aspiring unicorns may be of concern, experts said.

Ride-hailing firms took home the largest sum of over US$14 billion (S$19.3 billion) in four years, with leading players Grab and Gojek staging mega financing rounds to build up food delivery and financial services. Both have also acquired new ventures and started acting as investors in the ecosystem.

E-commerce has drawn US$9.9 billion in investments since 2016 and raised US$2.5 billion in the first half of this year, keeping close to its pace in the same period a year ago.

While the fintech sector saw a spike in investment, most of which went to payments and lending businesses, funding to other sectors such as online media has slowed.

For now, the bulk of funding has continued flowing to the biggest tech firms in the region, said the report. Unicorns, valued at over US$1 billion, attracted US$24 billion out of the US$37 billion raised in the recent four years.

But the report also found that even though nearly 70 aspiring unicorns, valued at between US$100 million and US$1 billion, have raised US$5 billion since 2016, more late-stage funding is needed for them to scale up.

This refers to investments ranging from US$25 million to US$100 million and above. To attract them, such aspiring unicorns, including cashback platform ShopBack and logistics provider Ninja Van, have to prove that they can rapidly grow and monetise their services.

Mr Arvind Sankaran, venture partner at Jungle Ventures, said some unicorns may be receiving a disproportionate share of new capital due to "investor herd mentality and fear of missing out". But as investors understand the region better, funding will be deployed to a broader, multi-stage base of start-ups.

Mr Christopher Quek, managing partner of venture firm Trive, said unicorns "have become too big to fail", with Grab and Gojek each having strong corporate and institutional backers which provide "go-to-market" access and strategic partnerships.

But the aspiring ones are of concern. If they are not careful in pacing their spending with revenue growth, they could burn out their cash investments, he said. They may also have a harder time raising capital as there are fewer significant investors which can help push their valuations to the next stage.

Mr Rohit Sipahimalani, joint head of the portfolio strategy and risk group at Temasek, said yesterday that there has been a funding gap in helping aspiring unicorns as "there was no natural investor base focused on this segment".

Investments of US$25 million to US$100 million may be too big for venture capital firms, he said, while larger private equity funds typically look at larger deals.

But this problem is starting to be addressed, he added. Venture capital investors are raising larger growth funds to back their most successful investees for longer periods, and institutional investors are becoming more willing to enter earlier stages of fund-raising.

The average deal size in early-stage funding has doubled in the past three years as well, from about US$2 million in 2016 for Series A funding to US$4 million this year.

"Success begets success," said Mr Sipahimalani, noting that there are 11 unicorns in the region. "Once you have more demonstrated winners, more and more people will want to come in at an early stage."