Transition VC targets ₹1,500 crore for second energy-focused fund

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Energy-focused venture capital fund Transition VC has begun raising a ₹1,500 crore (approximately $155 million) second fund, according to one of its co-founders.

“We want to repeat exactly what we did with fund one with far more resources, not just with capital but also with a team to support them to scale,” said Raiyaan Shingati, co-founder and managing partner at Transition VC, in an interview with Mint.

The second fund is nearly double the size of its maiden ₹800 crore (around $77 million) investment vehicle, which achieved its final close in December 2025. Transition expects to announce the first close of Fund II in the December quarter of FY27.

The larger fund lands at a moment when India's energy hardware sector, long seen as too capital-intensive and slow-moving for venture money, is drawing more institutional interest, given the country's targets for energy transition.

In March, Union cabinet minister for electronics and information technology Ashwini Vaishnaw announced that by 2035, India would have 60% of its installed electric capacity comprising non-fossil sources. This is one of the targets under India's Nationally Determined Contributions (NDCs), submitted to the UN as part of its climate commitments.

While greenfield renewable energy projects continue to require a large amount of capital, companies building storage solutions and in adjacent areas are where venture capital is looking to park money. Venture funds are betting that these companies stand to scale and generate sizeable revenues.

Transition backed battery infrastructure companies heavily through Fund I. However, while that thesis remains broadly the same, the firm has added other areas, including energy networks, thermal energy storage, advanced materials for energy-adjacent sectors, and geothermal energy.

The firm evaluates companies based on its belief that while some areas have been taken over by other countries, such as China in electric battery cells, there are spaces where Indian founders have a right to win. “Thermal energy storage is really attractive because industries fundamentally require heat,” said Shingati. “Storing heat directly is far more efficient and costs a third of battery storage. India is ahead of the curve on building that capability at the moment.”

India's next-generation energy storage market is estimated to be at $2.4 billion this year and expected to grow at a compound annual growth rate of 9.5% to hit $3.9 billion by 2031, according to market intelligence platform Mordor Intelligence.

For energy hardware and storage companies, there finally seems to be credible exit pathways for investors, according to experts.

“While IPOs are becoming increasingly viable for scaled businesses with differentiated technology, strong manufacturing capabilities and predictable revenues, M&A remains the more active and immediate route, driven by strong strategic interest from global hyperscalers, utilities, infrastructure funds and energy majors,” said Vasudha Madhavan, founder and chief executive of climate investment banking firm Ostara Advisors.

While Transition is keen on investing in nuclear energy, it won't be writing a cheque to these companies in the initial years of Fund II. Instead of directly backing such startups, the firm plans to back founders working in the nuclear energy value chain.

To be sure, funding for nuclear energy startups has been nothing if not weak. Pranos Fusion raised a $6.8 million seed cheque in March from pi Ventures and Ankur Capital. In 2024, Hylenr Technologies raised $3 million in a pre-series A round from Valour Capital and Chhattisgarh Investments, while Anubal Fusion raised $294,000 from longtime deeptech investor Speciale Invest that year as well.

Like most early-stage venture investors, Transition writes cheques anywhere between ₹20-50 crore ($2-5 million). The key difference, however, is that the firm is...