As reported in the Wall Street Journal (found here):

Singapore is pulling out all the stops to build its own version of Silicon Valley as it attempts to create a startup hub for Southeast Asia.

Excited by deals such as Facebook Inc. FB +0.12% ‘s $19 billion agreement last week to buy messaging company WhatsApp Inc., Singapore’s policy makers and technology entrepreneurs are betting that one day a tech giant could swoop down to grab one of its own homegrown startups. Venture-capital tech investments in Singapore last year outstripped those in Japan, South Korea and Hong Kong.

The city state, with its population of just 5.4 million, isn’t quite Silicon Valley. Singapore has yet to produce anything like a Google GOOG +0.04% or Facebook, much less a service like China’s messaging app Wechat, with 272 million monthly active users. It has had mixed success in trying to kick start innovation in various industries including biotechnology, media and entertainment.

Still, investors say the technology ecosystem here is becoming more active. One concern is that insufficient entrepreneurial spirit among young Singaporeans and the government’s financial largesse could inadvertently enable some startups to limp along on state funds, some analysts say.

In recent years, the Singapore government has been trying to fund local technological innovation by investing some $100 million Singapore dollars (US$79 million) for early-stage startups as part of the S$16 billion it has pledged for scientific research and development. Well-known U.S. venture capital firms such as Andreessen Horowitz have funded local startups, including video site Viki, which Japanese online retailer Rakuten Inc. 4755.TO -4.41% bought for $200 million in September. Rakuten also agreed earlier this month to acquire Cyprus-based messaging app Viber Media Inc.

Another Singaporean tech firm attracting investors is RedMart, an online grocery-delivery service founded in 2011 that has raised over $10 million from investors including Facebook co-founder and Singapore resident Eduardo Saverin.

One hotspot in Singapore’s fledgling startup scene is a seven-story, renovated factory building known as Block 71, west of downtown. On a recent Friday evening, a few dozen technology entrepreneurs gathered to drink beer, nibble on cheese and almonds, and discuss their startups.

Hugh Mason, a 47-year-old British entrepreneur, says there are about 100 startups and more than $1 billion of investment under management in the building.

In 2010, Mr. Mason and his friend, 38-year-old Singapore native and anti-spam pioneer Meng Weng Wong, co-founded Singapore’s Joyful Frog Digital Incubator, which hosts frequent gatherings at its headquarters in Block 71.

Mr. Wong, decked out in a three-piece suit and carrying the company’s green stuffed frog mascot Smoochy on his shoulder, moved about the room, introducing out-of-town visitors to regular attendees. A sign read, “Silicon Valley isn’t a place. It’s an idea.”

Venture capital invested in Singaporean tech firms by funds last year totaled $1.71 billion. While that is behind China’s $3.46 billion, it is ahead of Japan, South Korea and Hong Kong, according to data from Hong Kong-based Asian Venture Capital Journal. PricewaterhouseCoopers LLP and the National Venture Capital Association put venture funding for software companies alone in the U.S. at $11 billion last year. Still, funding devoted to Singapore’s tech firms, including from the government, skyrocketed last year to account for 19% of funding for Asia—up from just $27.9 million, or 0.3%, in 2011.

Brad Templeton, a Silicon Valley-based Internet pioneer who consults with Google Inc. on self-driving cars, said while Singapore’s tech scene seems more active now than it was in previous years, he noted “too much government can hurt a startup community rather than help it.”

In its policies, Singapore’s government has attempted to mimic Israel, which has developed a robust technology industry over the years. One government program designed to assist early stage startups is the “Technology Incubation Scheme,” which began in 2010. Under that program, the government co-invests up to 85% of capital in select startups, capped at the equivalent of S$500,000. Technology incubators—organizations typically run by startup veterans that provide mentoring and physical space—pitch in the remaining 15% and are allowed to buy out the government’s stake after three years. There are now 15 incubators and more than 100 startups participating in the program.

“In the past, I might have funded two or three startups a year. Now I’ve been doing one a month,” said Leslie Loh, who heads Singaporean venture capital firm Red Dot Ventures, which launched in 2011.

Douglas Abrams, who spent 14 years at JPMorgan in New York and has worked in Singapore’s technology venture-capital industry since 2000, said there has been a marked increase in the value of Singaporean “exits”—when startups are acquired or sell stock to the public. Mr. Abrams, now chief executive of technology venture capital firm Expara, noted that last year, some 20 firms had exits totaling more than S$400 million, compared to about S$50 million in previous years.

Razmig Hovaghimian, a 38-year-old American who started Viki as a class project at Stanford Business School, said he chose Singapore for its headquarters in part due to its proximity to key Asian markets. Though Viki was able to attract Series A funding from Andreessen Horowitz, the company benefited from Singapore’s sense of community, Mr. Hovaghimian said.

Steve Leonard, executive deputy chairman of Singapore’s Infocomm Development Authority, which is tasked with building the country’s technology industry, noted that Singapore offers good infrastructure, rule of law, and easy access to major markets.

“We’re still waiting for that Instagram or that WhatsApp,” said Scott Anthony, a Singapore-based managing partner at consulting firm Innosight. “It’s going to be a few more years, but I think it’s coming.”

Write to Newley Purnell at newley.purnell

Corrections & Amplifications Venture funding for Singapore’s technology sector soared to $1.71 billion last year from $27.9 million in 2011. An earlier version of this article and an accompanying chart incorrectly said it was $27.3 million in 2011.