Transition VC, a prominent energy transition-focused venture capital firm in India, has announced the launch of its second fund with a goal of ₹1,500 crore (about $155 million), aiming to scale startups pioneering breakthroughs in cleantech, advanced manufacturing, and industrial deeptech innovations.
- Fund II targets ₹1,500 Cr for deeptech and energy transition startups
- Plans investments of $2–5M in 20+ engineering-led startups by FY31
- Focus expands to advanced manufacturing, semiconductors, nuclear, and more
What happened
Transition VC, a Bengaluru-based venture capital firm specializing in the energy transition sector, has launched its second fund targeting a corpus of ₹1,500 crore (over $155 million). The fund will invest in startups working on energy transition, advanced manufacturing, and industrial deeptech technologies. Deployment of capital is set to begin in the third quarter of fiscal year 2026–27 with investments expected to span over four years.
This new fund follows Transition VC’s first fund, which had a ₹723 crore corpus and achieved a 57% internal rate of return (IRR) with over 3X multiple on invested capital (MOIC). The inaugural fund backed 17 startups in cleantech sectors including electric mobility, green hydrogen, energy storage, and climate technologies with typical cheque sizes from $500,000 to $1 million.
Why it matters
The launch of Transition VC’s second fund signals growing investor confidence in India’s deeptech and sustainable energy sectors. By increasing fund size and ticket sizes to $2–5 million, the firm aims to support startups that have surpassed early validation stages but need capital to scale product-market fit and commercial adoption. This approach is critical as India accelerates its energy transition and industrial innovation goals.
Expanding investment focus beyond traditional cleantech into areas such as semiconductors, nuclear energy, geothermal technologies, and next-generation energy infrastructure reflects the evolving opportunity landscape. The fund’s backing from global institutions, family offices, and corporate investors highlights broad-based interest in industrial deeptech, positioning the firm to capture value in nascent high-impact technologies.
What to watch next
Monitor the initial wave of investments Transition VC will make from Fund II starting in Q3 FY27, particularly which sectors and startups secure deployment. The firm’s ability to identify ventures that are transitioning from technical feasibility to viable commercial models will be crucial in measuring the fund’s impact and performance over the coming years.
Additionally, watch for competitive moves from other investors such as Lightrock and new climate or industrial deeptech funds entering the Indian market. How these funds co-invest or compete for deals could influence valuations and the development pipeline of cutting-edge energy and manufacturing technologies in the region.