Bengaluru-based Transition VC has launched its second venture capital fund with a target corpus of Rs 1,500 crore (around $155.7 million), as the firm looks to deepen its bets on India’s energy transition, advanced manufacturing and industrial deep-tech sectors.
The VC firm said that several existing limited partners have increased their commitments to the new vehicle and that it has also attracted interest from global institutions, corporate investors and family offices focused on the energy and industrial sectors.
The fund will invest $2-5 million each in around 20 engineering-led startups over a four-year deployment period beginning in the third quarter of the financial year through March 2027, the VC said in a statement.
The launch follows the deployment of the firm's maiden fund, which closed at Rs 723 crore last year, exceeding its initial target of Rs 400 crore.
Transition VC said the maiden fund generated a gross multiple on invested capital (MOIC) of more than 3x and a 57% internal rate of return (IRR) within three years. It is targeting a distributed-to-paid-in capital (DPI) of 1x over the next three years.
Founded by Raiyaan Shingati and Mohammed Shoeb Ali, Transition VC focuses on startups developing technologies across electrification, energy storage, industrial decarbonisation, alternative fuels and next-generation manufacturing.
With Fund II, the firm plans to continue investing across the energy transition value chain while expanding into adjacent sectors including advanced manufacturing, semiconductors, geothermal and the nuclear value chain.
“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,” said Shingati, co-founder and managing partner at Transition VC.
“Our goal with Fund II is to repeat the success of Fund I while allocating to new segments like advanced manufacturing, semiconductors, geothermal and the nuclear value chain,” he added.
The firm said it remains focused on startups that show technical feasibility and early commercial traction but are yet to achieve product-market fit at scale, a stage it believes remains underserved by venture investors.
Transition VC says it maps industrial value chains to identify investment opportunities before evaluating companies. It combines industry research, intellectual property tracking and AI-assisted sourcing to identify engineering-led startups.
Ali, co-founder and managing partner, said that Fund II will broaden the firm's investment strategy beyond companies serving the domestic market.
“Fund I was focused on backing energy technology startups serving the Indian market. With Fund II, we are expanding that focus by backing companies that are not only innovating in energy, but also manufacturing from India for global markets,” he said.
