The huge valuations being attached to tech start-ups in the region have sparked a warning from some venture capitalists that the investment frenzy has over-valued many companies and that a correction may be on the cards.
Mr Eugene Wong, managing director of Sirius Venture Capital, told The Straits Times: "The Alibaba listing spurred a lot of interest in venture capital, and fund-raising for private equity has become easier than it was five, 10 years ago.
"Now, funds from Japan, Europe and the United States are chasing start-ups in Singapore... When there's too much money chasing ideas, that raises questions of a bubble."
Vickers Venture Partners managing director Jeffrey Chi noted that last month's closely-watched public share offering of California payments start-up Square could be "indicative of things to come".
Square debuted at US$9 (S$12.70) a share and last traded at US$12.60, still below its most recent private financing round of US$15.46 a share.
Mr Chi said: "Their IPO (initial public offering) price was below their last private round valuation. Not quite a bubble, but investors need to exercise prudence to ensure they are paying fair value..."
BUBBLE WAITING TO BURST?
When there's too much money chasing ideas, that raises questions of a bubble.''
MR EUGENE WONG, managing director of Sirius Venture Capital.
IncuVest managing partner Ronnie Wee said today's mobile app boom is very different from the dot.com bubble that burst in 2000.
But there is still the risk of a correction in the hyped-up tech scene, where supersized peer valuations, while they exist, may not be the best guide of value, he added.
"If Uber (the ride-hailing app reportedly valued at more than US$60 billion) collapses to US$40 billion, that's not a bubble to me, that's a correction," he said.
"A bubble to me was back in 2000 when you had massive valuations and no evidence of any profits, no infrastructure, and no peer or proven business models."
Headline valuations of private tech firms are often inflated because new investors go in with the assurance that they will be the first to get their money back if the firm is sold at a price below what they paid, noted out Mr Wong.
"Most venture capitalists invest with a liquidation preference clause, and valuations get higher in subsequent rounds because they have that clause," he added.
Other market players, including Mr Patrick Grove, shrugged off comparisons with the dot.com craze.
Mr Grove came out of that crash with an aborted IPO and $2 million in debt, but last month sold Malaysia-based property listing site iProperty for A$751 million (S$769 million) - one of the largest South-east Asian start-up exits to date.
He said: "The level of interest in start-ups is comparable to early 2000, when the last bubble burst. But the interest is warranted because everyone is online now - unlike 1999 - and the prize is greater.
"We are not in a bubble, but like any investment class, many start-ups will fail and a few will survive and thrive."
Private equity investor Timothy Teo junked the notion that the strong slate of government support schemes for early-stage start-ups has created an easy funding environment for entrepreneurs.
Mr Teo said: "There are a lot of start-ups now, and it's not easy to raise money. You need a good story, but investors also care about your background, who you are.
"In the old days, valuations were just crazy and any idea appealed to investors... In 2000, you also saw people leaving good-paying jobs thinking they could take a dig at the gold mine. I don't see a get-rich-quick mentality today."