[YS Exclusive] Transition VC to launch new $150M international fund in 2026

Bengaluru-based Transition VC is planning to launch a $150 million international fund in 2026, Co-founder and Managing Partner Mohammed Shoeb Ali told YourStory. 

“We will be writing larger checks. Also, we will keep a lot of amount as bulk to do follow-ons also,” Ali said. 

This would be the venture capital firm’s second fund after the Rs 400 crore fund, which got regulatory approval in 2022 for three years and made its first close in mid-2023. 

According to Ali, the first fund has been subscribed to around 65%-70% to date. He wants the remaining 30% of investments to come from foreign institutions like development finance institutions (DFI) from Europe. 

So far, Transition VC has deployed about Rs 55 crore from the fund. It has invested in battery tech startup EMO Energy and EV charging network company Charge Zone, among others. “So far, we have been heavy on the mobility sector.”

Transition VC is looking to close the fund by December 2024 or, at most, by March 2025. “Our objective with the Rs 400 crore (fund), we want to invest in 25 to 30 startups within the energy transition domain,” he said.

The VC firm, which has invested an undisclosed amount in hydrogen fuel cell startup Protonas, said its next big focus is long-duration energy storage (LDES) technology. 

LDES technologies can help store electricity for long periods and complement the intermittent availability of renewable energy sources like solar and wind. 

Ali said that under LDES, the firm is very bullish on flow battery and thermal storage space. 

Flow or redox flow batteries are rechargeable batteries, where the chemical energy is stored in two chemical components dissolved in liquids. These batteries have a longer lifespan and can be easily scaled by adjusting the volume of the electrolyte, making it suitable for large-scale energy storage applications. 

Transition VC has already signed a flow battery startup but did not disclose the company’s name, citing that the two parties have pending paperwork to be completed. 

Ali added that the firm is also in the process of signing a waste heat recovery startup and will announce it in the coming weeks. 

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Transition VC on Tuesday also announced that it will be setting up a new accelerator, Faraday Electrochemical Energy Labs (FEEL), at its India—A Gateway to Global Entrepreneurs summit. The VC firm organised the event in partnership with IEEE as part of the ongoing “Net Zero Warriors” joint initiative between the two parties. 

“We are here to support startups even from an idea stage. So, we are getting an accelerator ready. If someone wants to build some interesting technology product, we would want to help, push, and mentor them and give whatever support. Not just for funding but whatever support required to make it successful,” he said.

The development comes amid heightened activity in the renewable energy and electric mobility space in India and globally. The country saw its first listed EV maker Ola Electric this month, and its competitor, Ather Energy, is also set to file for an IPO, according to media reports. 

On August 15, during India’s 78th Independence Day speech, Prime Minister Narendra Modi reiterated the country’s goal of achieving 500 gigawatts of renewable energy capacity by 2030 and emphasised the country’s commitment to becoming a global leader in green hydrogen production. 

(Disclaimer: Shradha Sharma, Founder and CEO of YourStory, is an independent director in Ola Electric)