Reduction of information entropy along with ever-increasing complexity is among the key signatures of life. Understanding the onset of such behavior in the early prebiotic world is essential for solving the problem of the origin of life. Here we study a general problem of heteropolymers capable of template-assisted ligation based on Watson-Crick-like hybridization. The system is driven off-equilibrium by cyclic changes in the environment. We model the dynamics of 2-mers, i.e., sequential pairs of specific monomers within the heteropolymer population. While the possible number of them is Z 2 (where Z is the number of monomer types), we observe that most of the 2-mers get extinct, leaving no more than 2Z survivors. This leads to a dramatic reduction of the information entropy in the sequence space. Our numerical results are supported by a general mathematical analysis of the competition of growing polymers for constituent monomers. This natural-selection-like process ultimately results in a limited subset of polymer sequences. Importantly, the set of surviving sequences depends on initial concentrations of monomers and remains exponentially large (2 L down from Z L for length L) in each of realizations. Thus, an inhomogeneity in initial conditions allows for a massively parallel search of the sequence space for biologically functional polymers, such as ribozymes. We also propose potential experimental implementations of our model in the contexts of either biopolymers or artificial nano-structures.