Start with a sliver of water between Iran and Oman. On a normal day, roughly a fifth of the world’s oil moves through the Strait of Hormuz. This year it stopped being normal. When the strait seized up, Brent jumped 10 to 13 percent in a single session into the low 80s and kept climbing to the highest level since 2022. The International Energy Agency, which does not deal in drama, called it the largest supply disruption in the history of the global oil market.
I am not here to cover the politics. I am here to follow the power. Because that one shock shows up three times in the Southeast Asian startup story this quarter, wearing three different costumes. It sold electric cars. It raised the price of the electricity our data centre boom depends on. And it gave every cautious LP one more reason to keep the chequebook shut. Energy, iron, and idle capital. Follow the power and you follow the whole region.
One. The war that sold a million electric cars
The lazy version of this story is “war happened, everyone bought an EV.” That is not what happened. What happened is that a fuel shock landed on top of a shift that was already moving fast, and poured petrol, pun intended, on the fire.
The scale first. In 2025, EV sales in Southeast Asia more than doubled year on year to more than half a million vehicles, and more than 90 percent of those were full battery electric, not hybrids. The demand was already there. Then the petrol queues showed up. One Thai market report described long lines at filling stations on the same days that EV displays pulled the biggest crowds at the Bangkok motor show. That is the whole story in one image. One queue for the old thing, one crowd for the new one.
Go around the region and the averages hide the real story. Vietnam is the outlier nobody outside Asia talks about: EV share of new cars hit close to 40 percent in 2025, ahead of the UK and the EU, almost entirely on the back of one company, VinFast, which targets 300,000 deliveries this year after 175,000 last. Thailand is the cleanest fuel link, with EV sales tripling year on year to over 44,000 units in January 2026 alone, and logistics fleets switching specifically to cut their exposure to fuel cost swings. When the fleet operators move, it is about the spreadsheet, not the planet. Indonesia crossed 15 percent EV share and passed the United States, with Chinese brands taking more than 75 percent of the market. This is not a Western EV story. It is a Chinese supply story with a Southeast Asian buyer. And Malaysia, my home market, is earlier and more honest: adoption up 14-fold since 2022, but still only about 5.5 percent of cars sold, held back by roughly 5,000 public charge points. You cannot fuel-shock your way past missing infrastructure.
None of this is just consumers being noble. It is policy and cheap money. Thailand cut excise on passenger EVs from 8 percent to 2, and to zero on electric pickups. The Philippines went further, putting forward an incentive package worth around 60 billion pesos while ending subsidies for combustion engines, with the reporting tying the move directly to the oil shock. Read that again: a government using an oil crisis as cover to stop subsidising petrol and start subsidising electrons. Then the banks did the quiet part. In Singapore, UOB ran a green car loan at 1.5 percent, DBS at 2.48. When a bank prices your electric car loan below your petrol one, the moral argument is over. The maths makes the decision.
The part that matters for operators is the fleet. Grab signed with BYD to put up to 50,000 EVs into its fleets across the region, with an eco-friendly toggle in Singapore and Thailand. GoTo took the other lane, going after two wheelers with a pledge to electrify Gojek’s motorbike fleet by 2030. On autonomy, be honest: the robotaxi headlines are a US and China story. Out here the fundable shift is the powertrain under the existing driver, not removing the driver. If you are pitching autonomous ride-hailing for Southeast Asia this year, the oil shock did not help you. The EV swap did.
Here is where I land, and it is not the clean version. The war did not invent this boom. China did, with cheap good cars and a supply chain nobody here can match, and governments did, with subsidies written before anyone fired a missile. The shock just compressed years of slow behaviour change into a few quarters. And demand pulled forward by a price spike can snap back. If Hormuz reopens and Brent drifts back to the 60s, some of this 2026 surge was borrowed from 2027 and 2028. The companies that survive that are the ones building real local supply, financing, and charging, not the ones riding a fear premium.
Two. Twenty billion lands in Johor, and DayOne raises four and a half
We have covered the Malaysian data centre build before, so I will not reread the brochure. I want to follow the money one step further than the headlines do.
Announced data centre capex across the region now runs past 20 billion US dollars over the 2024 to 2028 window, and that is committed, not deployed. AWS around 9 billion into Singapore, Google 5 billion plus 2 for its first Malaysian site, Microsoft a couple of billion more into Malaysia and Indonesia. On top of that, private money: AirTrunk alone is putting 12 billion ringgit into two new Johor campuses, taking its Malaysian commitment to roughly 27 billion ringgit, call it 7 billion dollars. And just this month DayOne, the Singapore-domiciled operator that flipped out of China’s GDS, closed a 4.5 billion dollar Series C led by Coatue and Hillhouse with Indonesia’s sovereign fund alongside. Hold that name, because it comes back in the third act.
Now the question nobody asks: what is that money actually buying? Land, concrete, power, cooling, and imported chips. A hyperscale data centre is a real estate and energy project wearing an AI t-shirt. The single biggest cheque inside it goes to Nvidia. Very little of that 20 billion touches a local software founder. This is not venture capital landing in the region, it is construction capital.
So what is the secondary effect on the rest of us? Three things, and I want to be balanced. First, cost. These campuses pull on the same grid and water local businesses use, and Malaysia stopped approving non-AI data centre proposals back in 2024 to keep the power for AI builds. The state is rationing power and choosing hyperscalers. When your tariff drifts up in three years, this is part of why. Other parts of the world now require operators to reinvest into the local energy and water network to offset that pressure. I have not seen that proposed seriously in Malaysia yet, and I would like to. Second, jobs. A hyperscale campus employs a crowd for eighteen months of construction, then a skeleton crew. It is not a founder-jobs engine. Third, and this is the genuine prize: if the build is done right, founders get cheaper, closer compute and local data residency, the thing that lets a regulated fintech or health startup build on sovereign infrastructure without stitching together a compliance workaround.
The roads analogy is the honest one. Infrastructure is an enabler, not the destination. The data centre boom only pays off for the domestic economy if we generate the demand to use it: enterprises and government going properly digital, and a real layer of AI-native startups creating the load these campuses were built for. Lay the road, then you still need the trucks. Capital keeps flooding the iron. Whether it earns its return depends entirely on who drives on it.
Three. The lowest deal count in eight years, sitting on a mountain of cash
Two facts that should not be true at once. In the first quarter of 2026, Southeast Asian startups raised about 2.8 billion dollars across 98 equity deals, the lowest quarterly deal count in at least eight years, and even that is flattered by one or two giant infrastructure cheques of the DayOne variety. Meanwhile APAC investors sit on roughly 240 billion dollars of dry powder, down from a 2023 peak near 315 but hardly an empty tank.
So which is it, drought or hoard? Both, and the contradiction is the story. The money exists. It is just not moving into Southeast Asian early stage. The last clean read on region-specific dry powder was around 7 billion dollars, a couple of years old and probably overstated, but the direction is the point: funding here fell about 70 percent from the 2021 peak while the cash pile barely moved. That is not a region that ran out of money. That is a region whose investors went on strike.
Where did the new money go instead? Peak XV, the old Sequoia India and Southeast Asia team, closed 1.3 billion late last year, labelled India Seed, India Venture, and APAC. India now runs hundreds of active early-stage funds and has climbed from roughly 9 percent of APAC capital markets volume toward 20. The APAC money is concentrating into India for growth and Japan for buyouts, not Southeast Asian seed. So when a Singapore GP tells you the market is tough, hear it precisely. It is not that Asia has no money. It is that the money is choosing India’s depth and Japan’s stability over our fragmentation and our weak record in the asset class. Capital is being selective, and Southeast Asia is the one being un-selected.
Then layer the war back on. In March the reporting was blunt that the Iran conflict threatened to deepen Asia’s worst private equity fundraising slump in a decade. An oil shock spikes uncertainty, and uncertainty is the enemy of a new fund commitment. The same barrel of oil that sold an electric car in Bangkok made a pension fund in the West, and a high-net-worth backer here, think twice about a new Southeast Asian VC. Cash gets more cautious exactly when founders need it to get braver.
So do not buy the clean drought story, and do not buy the clean abundance story either. The honest version: the tank is full, the driver is scared, and the road out, meaning exits, still looks rough. 98 deals is not a money problem. It is a conviction problem and an exit problem wearing a money problem’s clothes. And even that 7 billion dollar regional figure is fuzzy, because so much of it sits in Singapore holding structures that can deploy anywhere from Jakarta to Bangalore. When the domicile lies, the dry powder number lies a little too.
The money is here. It is waiting for a reason. Your job, whether you are building or, like me, allocating, is to be the reason it stops sitting still.
Sources and further reading: IEA Global EV Outlook 2026 · RECCESSARY, Thailand EV 2026 · VinFast targets, Nikkei Asia · Philippines incentives, Gulf News · Grab and BYD · AirTrunk Johor, NST · DayOne closes $4.5B, Crowdfund Insider · DayOne, the Singapore flip, Asia Tech Review · SEA Q1 2026 deal review, DealStreetAsia · APAC PE Report 2026, Bain · Peak XV $1.3B, YourStory
