Transition VC has launched its second investment fund with a target corpus of ₹1,500 crore, strengthening its focus on India’s growing energy and deeptech startup ecosystem. The Bengaluru-based venture capital firm will invest in engineering-led startups building technologies for the future of energy while also expanding into new industrial sectors.
The new fund is expected to start investing from October 2026, with the investment period spread over the next four years. Transition VC plans to complete the first close of the fund before December 2026. Through Fund II, the firm will invest between $2 million and $5 million in around 20 to 23 startups working on hardware and deeptech innovations.
The fund has already received strong support from investors who backed its first fund. It has also attracted interest from global institutions, corporate investors, strategic partners, and family offices that focus on the energy and industrial sectors.
Fund II Will Invest in New-Age Energy and Industrial Technologies
Transition VC will continue investing in startups across the energy value chain. Its main focus areas include electrification, energy storage, industrial decarbonisation, electric mobility, green hydrogen, net-zero buildings, and alternate fuels.
At the same time, the new fund is expanding into several high-growth sectors for the first time. These include advanced manufacturing, application engineering, semiconductors, geothermal technology, next-generation energy infrastructure, and the nuclear value chain.
Unlike Fund I, which mainly invested in startups serving the Indian market, Fund II will also support companies that manufacture products in India for global export markets. This move matches India’s growing goal of becoming a global manufacturing hub.
Transition VC mainly invests in companies building the technology behind the energy industry instead of end products. For example, rather than investing directly in electric vehicle makers or solar companies, it prefers startups developing batteries, power electronics, communication systems, industrial technologies, and other important hardware solutions.
Its portfolio has been built in a way that different startups work in different parts of the energy ecosystem. This allows founders to share industry knowledge, supplier networks, and business opportunities without competing with each other.
Strong Performance of Fund I Builds Confidence
The launch of Fund II comes after the strong performance of Transition VC’s first fund. Fund I was initially launched with a target of ₹400 crore but was oversubscribed and finally closed at ₹723 crore in December 2025.
According to the firm, Fund I has delivered a 57% internal rate of return (IRR) within three years and achieved a multiple on invested capital (MOIC) of more than 3x. The portfolio has also recorded zero write-offs so far. Several startups have become profitable, raised follow-on funding, and are moving towards annual revenues of more than ₹100 crore.
Fund I has invested in 17 startups so far and plans to increase that number to around 25. The firm usually invested between $500,000 and $1 million in each company during the early stage.
Some of the startups in its portfolio include Emo Energy, Matel Motion, Dynolt, Hydgen, Promethean Energy, Comminent, CIMWare, Intrinsic Foundries, Helionis Labs, ZeroDrag, Prithu, WorkOnGrid, GreenTech MW, Protonas, Fitsol, and GreenFi.
Transition VC believes that supporting startups working on different technologies creates a stronger ecosystem than investing in companies competing in the same space.
Transition VC Focuses on the ‘Missing Middle’ Stage
One of Transition VC’s biggest strengths is its focus on what it calls the “missing middle.” Instead of investing only in idea-stage startups or waiting until companies become large businesses, the firm backs startups that have already proved their technology and gained early customers but still need funding to grow.
This stage is often ignored by many venture capital firms because hardware startups usually need more time and capital than software companies.
Instead of depending mainly on startup applications, Transition VC follows a research-based investment strategy. The team studies industrial value chains, tracks global patent activity, and uses AI-powered tools to find technology gaps in India’s energy sector before identifying promising startups.
The firm’s leadership believes India’s energy demand will rise sharply in the coming years because of manufacturing growth, artificial intelligence, data centres, and rising incomes. To prepare for this future, Transition VC is investing in technologies that can strengthen India’s manufacturing capabilities and reduce dependence on imports.
The firm also helps founders raise debt funding after proving their business model with equity investments. This allows startups to grow while helping founders keep a larger share of their ownership.
With its new ₹1,500 crore Fund II, Transition VC aims to become one of India’s leading early-stage investors focused on energy transition and industrial deeptech. As India continues to invest in clean energy and advanced manufacturing, the firm plans to support startups building world-class technologies from India for global markets.