SINGAPORE - Ride-hailing firms have taken home the lion's share of investor dollars in South-east Asia's Internet economy, amid intense competition among tech firms to become the region's first "super app".

Almost 70 per cent of funding went to companies in ride-hailing and e-commerce from 2016 to the first half of 2019, according to a joint study by Google, Temasek and Bain & Company.

The study released on Thursday (Oct 3) noted that South-east Asia has remained a bright spot with funding flows growing at a "healthy pace", even as global venture funding dropped 17.5 per cent in the second quarter of 2019 from a year ago amid slowing economic growth and a cloudy outlook.

Ride-hailing firms took home the largest sum of around US$14 billion(S$19.4 billion), with its two leading players Grab and Gojek staging mega financing rounds to build up food delivery and financial services, said the report. It added that both have also acquired new ventures and started acting as investors in the ecosystem.

E-commerce has attracted US$9.9 billion worth of investments since 2016, and is on track to meet the record US$4.3 billion raised in 2018.

Funding to other sectors such as online media, however, has slowed.

The bulk of funding has continued to flow to the biggest tech firms in the region, with unicorns in the region attracting US$24 billion out of the total US$37 billion raised. These refer to start-ups valued at more than US$1 billion.

Nearly 70 "aspiring unicorns" - companies valued at between US$100 million and US$1 billion - have raised more than US$5 billion since 2016 as well.

But more late-stage funding is needed for them to scale up, the study found.

Companies in this category include cashback platform ShopBack, logistics provider Ninja Van and financial products marketplace GoBear.

For 'aspiring unicorns' to graduate, South-east Asia needs more late-stage financing through investments that range from US$25 million to US$100 million and above, the report added.

To attract such investments, the companies need to prove that they can rapidly grow their business either by successfully entering new markets, expanding to other sectors or securing exceptional levels of user engagement and loyalty. They will also have to show that they can monetise their services.

While venture capital investors are raising larger growth funds to back their most successful investees for longer periods, institutional investors are becoming more willing to enter earlier stages of fund-raising.

The support for start-ups "signals the strong potential the region holds for investors in the long term", said the report.

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

Singapore remains the gateway for regional funding and is on track this year to match the record deals and funds raised in 2018, it added.

There was US$5.3 billion raised in 297 deals here in the first six months of the year, including multi-billion dollar financing rounds by ride-hailing firm Grab and New York-listed e-commerce operator Sea Group.

Elsewhere, funding in Indonesia is on track to break its 2018 record, while the e-commerce sector powers Vietnam's Internet boom.

The large travel sector and fast-growing online media are "bright spots" in Thailand but its ventures have been facing challenges in raising late-stage funding to scale up the businesses.