Transition VC Launches INR 1,500 Crore Fund II to Back Engineering-Led Energy and Industrial Startups

Transition VC, an energy transition-focused venture capital firm, has announced the launch of Fund II, with a target corpus of INR 1,500 crore. The fund will invest USD 2–5 million in approximately 20 engineering-led startups over a four-year deployment period beginning in Q3 FY27.

The launch follows the successful deployment of Fund I, which closed at INR 723 crore, exceeding its initial target of INR 400 crore. Within three years, the fund has delivered a 57 percent IRR and generated over 3x MOIC. The fund is targeting 1x DPI over the next three years. The portfolio has recorded zero write-offs, with several companies already profitable, securing follow-on funding and scaling towards INR 100 crore-plus annual revenues.

The company had launched Fund I with the conviction that India's next-generation venture-scale companies would emerge from engineering-led innovation across the energy transition. Guided by industry research, the firm identified more than 40 structural white spaces where India has the potential to build globally competitive businesses. Building on that thesis, Fund II will continue investing across the energy transition value chain while expanding into adjacent sectors such as advanced manufacturing and application engineering, reflecting the growing convergence between energy systems and industrial technologies. The firm will also selectively evaluate emerging opportunities in areas including nuclear, geothermal and next-generation energy infrastructure as part of its evolving investment strategy.

Transition VC is focused on creating a complementary portfolio across multiple layers of the energy and industrial value chain, enabling portfolio companies to leverage shared technical expertise, strategic partnerships and ecosystem synergies to accelerate innovation and sustainable growth. 

Raiyaan Shingati, Co-Founder and Managing Partner at Transition VC, 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. Our conviction remains that breakthrough technologies can deliver decarbonisation while making energy and industrial systems faster, cheaper and better. Building on the success of Fund I, which delivered over 3x MOIC in three years and validated our thesis, our goal is now to convert that MOIC into DPI over the next three years.”

He further added, “Our goal with Fund II is to repeat the success of Fund I while allocating to new segments like Advanced Manufacturing, Semiconductors, Geothermal and nuclear value chain.”

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. We'll also invest in technology-enabled manufacturing across the energy value chain, where we believe significant long-term value will be created,” said Co-Founder and Managing Partner, Shoeb Ali, Co-Founder and Managing Partner, Transition VC.

The firm's sourcing strategy complements this approach. Rather than relying on inbound deal flow, Transition VC follows a top-down, thesis-led investment process, mapping industrial value chains to identify structural white spaces before evaluating companies. The team works closely with industry experts to understand why technologies have succeeded or failed globally, tracks emerging innovations through global IP filings, and uses AI-assisted discovery to identify companies solving critical engineering problems. This is complemented by a growing ecosystem of founders, customers, operators and LPs that enables the firm to source opportunities long before they become visible to the broader venture market.

Shantanu Chaturvedi, Partner at Transition VC, said, “Our experience with Fund I reinforced that successful deep-tech investing comes down to three things: One, knowing when a technology is ready for commercial adoption. Second, understanding whether it can become a large, economically viable business. And third, backing founders with the resilience to navigate long product development cycles and changing market conditions. These principles continue to guide every investment we make through Fund II.”

The fund has already received continued participation from several existing investors, with multiple Fund I limited partners increasing their commitments. It is also witnessing strong interest from global institutions, corporate investors and family offices with deep expertise across the energy, engineering and industrial sectors.