Transition VC launches Rs 1,500 Cr Fund II

Transition VC, the Bengaluru-headquartered venture capital firm with focus on the energy transition segment, has announced the launch of its second fund with a target corpus of Rs 1,500 crore.

The firm had previously raised Rs 723 crore through its first fund. It claimed that it delivered a 57% internal rate of return (IRR) and generated over 3x multiple on invested capital (MOIC).

In the second fund, Transition VC said it plans to invest $2-5 million each in over 20 engineering-led startups over a period of four years starting from the third quarter of the current fiscal.

The VC firm said it has already received continued participation from several existing investors, with multiple Fund I limited partners increasing their commitments. Besides, there is interest from global institutions, corporate investors and family offices.

Transition VC Co-Founder and Managing Partner Raiyaan Shingati said, “The world is going to change the way it generates and consumes energy, and recent geopolitical events have reinforced that energy security is now as important as energy sustainability. India is uniquely positioned to lead this transition by combining one of the world’s largest domestic markets with globally competitive engineering talent and cost-efficient manufacturing.”

He further said, “Our conviction remains that breakthrough technologies can deliver decarbonisation while making energy and industrial systems faster, cheaper and better.”

The VC firm said in its first fund, it recorded zero write-offs, with several companies already profitable, securing follow-on funding, and scaling towards Rs 100 crore-plus annual revenues.

Transition VC remains focused on the "missing middle" of venture capital - companies that have proven technical feasibility and early commercial traction but are yet to achieve product-market fit at scale (post-product- pre-PMF). The firm believes this remains one of the most underserved stages of venture investing, offering an opportunity to back engineering-led businesses before commercial validation is fully priced into the market.

“Fund I was focused on backing energy technology startups serving the Indian market. With Fund II, we're expanding that focus by backing companies that are not only innovating in energy, but also manufacturing from India for global markets,” said Transition VC Co-founder and Managing Partner Shoeb Ali.

The Fund II of Transition VC will continue with the investment thesis of the Fund I of investing in the energy transition segment and also expand into adjacent sectors such as advanced manufacturing and application engineering. Besides, it will also selectively evaluate emerging opportunities in areas including nuclear, geothermal and next-generation energy infrastructure.