Transition VC Launches ₹1,500 Crore Fund II for Energy and Industrial Deep Tech

Transition VC, the Bengaluru-based firm that bills itself as India's first venture fund dedicated to the energy transition, has launched its second fund with a target corpus of ₹1,500 crore — about $150 million. Announced in the week of 21 July 2026, Fund II is roughly double the size of the firm's debut vehicle and signals growing investor appetite for the engineering-heavy, hardware-first startups that sit at the intersection of climate and industry.

A bigger, broader mandate

Fund II will back engineering-led startups across the energy transition, while widening its lens to include advanced manufacturing and application engineering. The firm has said it will also consider opportunities in adjacent frontier areas such as semiconductors, nuclear energy, geothermal technologies and next-generation energy infrastructure — a notably industrial slate that reflects where India's decarbonisation and self-reliance agendas increasingly overlap.

The fund plans to write cheques of between $2 million and $5 million into roughly 20 to 23 hardware and deep-tech companies spanning the energy demand and supply chain. Investments are expected to begin in October 2026 and be deployed over about four years, giving the firm a runway to build a concentrated, high-conviction portfolio rather than spraying capital thinly.

Building on a strong first fund

The raise comes off a debut fund that outperformed its own targets. Fund I closed at ₹723 crore against an initial goal of ₹400 crore, and within three years the firm says it has delivered a 57 percent internal rate of return and generated more than 3x on invested capital (MOIC) — the kind of early markers that make follow-on fundraising materially easier.

Transition VC was founded by Raiyaan Shingati, its co-founder and managing partner, and Mohammed Shoeb Ali. Several backers of the first fund are returning for the second, with some increasing their commitments. Shingati said Fund II was also drawing "strong interest from global institutions, corporate investors and family offices," a sign that international capital is starting to view Indian climate and industrial deep tech as an investable category rather than a niche.

Why it matters for India's deep-tech ecosystem

Hardware and deep-tech startups have long struggled to raise capital in India, where investors historically favoured asset-light consumer internet and software plays with faster exits. Engineering-led companies — battery makers, electrolyser developers, grid-scale storage firms, industrial-automation ventures — need patient money and technical diligence that generalist funds are often unequipped to provide. A specialist fund of this size, run by investors who understand the physics and the unit economics, helps fill that gap.

The timing aligns with a wider shift. Recent industry data has shown deep tech steadily attracting a larger share of Indian venture funding, and manufacturing, energy and industrial themes have begun rivalling pure AI for investor attention. Transition VC's expanded mandate — and its willingness to look at semiconductors and nuclear alongside batteries and green hydrogen — mirrors the government's own framing of energy security, manufacturing and strategic technology as a single, interlocking priority.

For founders building the unglamorous machinery of the energy transition, a larger, sector-focused pool of capital with a demonstrated track record is welcome news. The real test, as always, will be whether Fund II's portfolio can turn engineering promise into deployed, revenue-generating industrial technology.

Sources

• Transition VC Launches ₹1,500 Cr Fund To Back Deeptech Startups — Inc42
• Transition VC launches Rs 1,500 crore Fund II to back energy and industrial deeptech startups — Indian Startup News
• Transition VC launches Rs 1,500 crore Fund II — YourStory
• Transition VC Launches INR 1,500 Crore Fund II to Back Engineering-Led Energy and Industrial Startups — Energetica India