Asia's economic power triggers a capital flood into startups

Ma Rui, partner for China at the seed fund and accelerator 500 Startups, said the spectacular success of Internet-based businesses is fueling startup growth.

"Tech entrepreneurship is one of the few ways a talented young person with few resources and dollars can create something that affects millions of people in a fairly short amount of time."

Successful private enterprises are jumping on the bandwagon by developing incubation centers and investing in a growing number of tech startups in the region.

The Internet giant Tencent Holdings Ltd is building a center for technology startups in Chongqing, in partnership with the municipal government. It plans to develop 25 such ideas incubators across the country.

In April, Alibaba Group Holding Ltd announced it would set up a startup incubator for mobile Internet and mobile commerce in the Indian city of Bangalore, and Google has launched its startup incubator Campus Seoul in South Korea.

In India, startups have received some huge investments lately. Based on data compiled by a startup news website, YourStory, in the first quarter of this year 147 deals were put together. Indian startups raised $1.7 billion, registering a 300 percent annual growth. In the first quarter of last year alone, startups in the country raised $450 million. A total of 300 deals were closed last year. Kris Gopalakrishnan, co-founder of Infosys, one of India's biggest IT companies, said most of the investments from global investors or venture capitalists are happening at the seed stage.

"Angel funding typically happens locally," added Gopalakrishnan, who is also chief mentor of Startup Village, a technology business incubator in the southern state of Kerala.

Justin Hall, principal of Golden Gate Ventures of Singapore, said there is now more venture capital in the Asia-Pacific region than at "any other time in recent memory".

"It has had a tremendous catalyzing effect on the formation of new startups, from Singapore to Indonesia. These are exciting times for the sector," added Hall.