Bengaluru-based Transition VC has unveiled its second fund targeting ₹1,500 crore to back energy and industrial deeptech startups. The fund plans to invest between $2 million and $5 million each in approximately 20 to 23 companies starting in October 2026. This move highlights growing institutional interest in supporting engineering-led hardware firms that are moving toward commercial scale.
Detailed Coverage
Transition VC is expanding its footprint in the Indian deeptech ecosystem with the launch of its second fund. The Bengaluru-based firm has set a target of ₹1,500 crore, equivalent to about $150 million, to provide capital to startups focused on energy transition and industrial technology. This fund follows the firm's earlier successful capital raise and marks a continuation of its focus on hardware-based engineering solutions.
The investment strategy for this new vehicle centers on companies that have moved past early-stage technical testing but require further support to achieve full-scale market presence. Transition VC refers to this segment as the missing middle. The firm plans to select between 20 and 23 companies, deploying between $2 million and $5 million per startup. The investment phase is scheduled to begin in October 2026 and will span a four-year window.
Strategic Investment Areas
The fund will target a broad range of industrial applications beyond traditional energy generation. Future portfolio considerations include semiconductors, nuclear energy, geothermal technologies, and advanced manufacturing infrastructure. By diversifying into these sectors, the firm aims to capture opportunities across the entire energy supply and demand chain. This approach represents a slight broadening of its previous strategy, which primarily focused on core energy transition projects.
Historical Context and Performance
The launch of this second fund comes after the firm closed its maiden fund at ₹723 crore in December 2025. That initial vehicle notably exceeded its original goal of ₹400 crore. According to the firm, Fund I maintained a strong performance profile, recording an internal rate of return of 57% and a multiple on invested capital of over three times within its first three years. These figures reflect the early-stage success of its portfolio companies, which operate in diverse fields like battery technology, electric motors, power electronics, and hydrogen systems.
Investor Participation
Transition VC has reported that a portion of the investors from its first fund have committed to the second fund, with some increasing their total investment. The firm has seen participation from global institutions, corporate investors, and family offices. For investors in the broader market, the success of this fund-raising effort and the subsequent deployment progress will be key indicators of institutional appetite for Indian hardware and deeptech ventures. The primary monitorable for the coming months will be the pace of capital deployment and the specific startups selected for the initial rounds starting in late 2026.