“There’s a joke that start-ups in Silicon Valley would add a zero behind their asking price if they knew Chinese investors were interested because of their reputation for being willing to bet large sums of money,” said Grace Yun Xia, Singapore-based principal at Jungle Ventures, which is looking to raise US$200 million for a third fund targeted at Southeast Asia.

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Jungle Ventures’ strategy is to invest in start-ups that can solve problems endemic to the region, according to Xia, who was formerly the senior director of corporate strategy and investment at Tencent.

Consumer lending, fintech and payments should continue to be hot areas for investment because they are “pain points”, she said.

Financing for Southeast Asia’s technology sector totalled US$6.3 billion across 422 deals last year, up from about US$300,000 for 100 deals in 2012, according to data from venture capital research service CB Insights. It recently reported that Hong Kong-listed Tencent, which runs China’s largest video games and social media businesses, had been most active investing in North America from 2013 to March this year. In the same period, e-commerce giant Alibaba, along with affiliate Ant Financial Services, has focused on investing in the rest of Asia.

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Speaking at a lunch with lawmakers in Washington, Trump said the Committee on Foreign Investment in the United States (CFIUS) would help counter the acquisition of US companies that develop advanced technologies. CFIUS is an inter-agency body that assesses the national security implications of mergers, acquisitions and takeovers that could result in foreign control of any US business.

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“I just got off a call last night with yet another top unicorn in China,” said Khailee Ng, a managing partner at 500 Startups overseeing its Southeast Asia fund. “They redirected interest to Southeast Asia but also India. I haven’t spoken to my contacts at other firms yet, but I would not be surprised.”

A redirection of investor money into Southeast Asia would benefit start-ups looking to raise funds.

One of the most prominent start-ups out of the region, by far, is Grab, which was established as a taxi-booking app in Singapore and Malaysia (its earliest names were GrabTaxi and MyTeksi, respectively), and is now in eight markets. Grab has telegraphed its ambitions to become a platform company and started a venture capital arm to back promising start-ups that it can integrate into its business.

Its rival, Go-Jek, is currently in fewer countries, but has more services than Grab on its booking app in Indonesia, from massages to home cleaning to filling pharmacy prescriptions. It, too, has announced plans to expand regionally, with Thailand and Vietnam as the first stops in its foray outside its home market.

“Historically what has been the biggest opportunities are copycat models – what has worked elsewhere … like the US and China – transplanted over here,” said Ng, who has invested in Grab. “There are still pockets of business models that can be replicated and are not done very well in Southeast Asia, specifically within fintech.”

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“On the horizon of trends for start-ups that we’re betting on is deep tech,” he said. “We see Southeast Asia as a market ready to accept solutions that come from life sciences, energy, big data, artificial intelligence and even from space.”

Still, Southeast Asia remains relatively under-represented in terms of start-ups with the potential to scale up.

In Thailand, the entire start-up scene began taking off only three years ago in 2015, according to Robert Lomnitz, director of Bangkok Venture Club, a network of investors, entrepreneurs and executives.

And because many of the Southeast Asian countries are mobile-first markets, they have skipped the progression seen in more mature markets, Lomnitz said. This has also meant that the mobile network operators in Thailand have been incubating the start-ups to look for content and mobile apps that they can use, whereas in other more developed markets, the incumbents typically are the ones being disrupted and challenged by start-ups, he said.

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“Literally it went from writing things on a piece of paper to a 4G network in almost no time,” Lomnitz said. “That makes the market very different from historical early-stage markets, so I think it will be quicker, the growth of all of this … Business models are different and the approach needs to be a little different as well.”

All the investors and entrepreneurs that the South China Morning Post spoke with over the past month from around the region said the diversity in this large market was both a competitive advantage for local players and a defensive moat against external players.

For Tan Yinglan, founding managing partner of Insignia Venture Partners, Southeast Asia has just started the second half of a metaphorical football match.

“In the first half, the platform companies in e-commerce, ride-hailing and game publishing have been established,” said Tan, who has invested in start-ups such as used-car marketplace Carro and co-working space EVHive. “In the second half, where the models involve local operations and are transactional, it would be challenging for these players to build their own operations in Southeast Asia, and we believe that they are more likely to make strategic investments or acquisitions.”

The opportunities are in industry segments such as automobiles, property, logistics, health care, education, Tan said. He is steering clear of areas like live-streaming, news-reader apps and other asset-light businesses where Chinese players as well as the likes of Facebook and Google are competing.

China’s start-ups attract almost half of world’s venture capital investments

The increasing interest in Southeast Asia means that valuations inevitably are heading up. While that is good news for entrepreneurs, it also means the risks and expectations for start-ups among investors are higher.

Valuations in Southeast Asia are “much more reasonable at the lower levels, at the higher level, when you’re raising half a billion dollars, you’re playing on the global stage, it’s the same globally,” said Ong Peng Tsin, managing partner of technology fund Monk’s Hill Ventures and co-founder of Match.com. “My personal opinion is that there’s too much money floating around.”

“For some investors [they think] ‘If I invest money and I lose money, I don’t make money. If I don’t invest money, I don’t make money. So the only way I make money is if I invest it.’ So the bias is strong for investors to invest in spite of the risk,” Ong said.

“So you’re seeing all these billion of dollars pumped into the global PE tech market. If the companies can keep up, that’s OK, but not all of them can keep up.”