Transition VC Launches INR 400 Cr Maiden Fund To Back Cleantech Startups

Bengaluru-based venture capital (VC) firm Transition VC has launched its maiden fund worth INR 400 Cr (around $49 Mn) with a greenshoe option of another INR 200 Cr ($24.5 Mn) to back startups across cleantech segments such as emobility, green hydrogen, energy storage, net zero and climate tech.

The VC firm will write cheques worth between $500K and $1 Mn, backing up to 40 early-stage startups over the next three years with its maiden fund.

Transition VC said it will likely announce the first close of its fund by the end of 2022.

The Bengaluru-based VC firm will also set aside a quarter of the total fund value to invest in global startups working in its target sectors. The VC firm said its strategy with global investments would be to invest in developed market products that could also be introduced in India.

Transition VC was established earlier this year by VCs Raiyaan Shingati, Mohammed Shoeb Ali, Mustafa Wajid, Naresh V Narasimhan, Tejas Goenka, Saif Qureishi, and Rajesh Doshi. The team invested in two cleantech startups – Charge+Zone and Exponent Energy – before setting up the company.

Speaking on the fund launch, Raiyaan Shingati, the cofounder and managing partner of Transition VC, said, “Climate change & energy transition is a business opportunity, as they demand reinvention of every segment of the industry. We are at the beginning of a new era! Major shifts like this don’t come around that often, but we are starting to see one now & it’s going to shape how people consume energy for decades to come.”

Transition VC’s general partner Mustafa Wajid said the company will look to invest in projects that enable a decarbonised world and solve key energy challenges. 

“To support such startup teams at a pivotal juncture in their entrepreneurial journey, we will deploy a unique combination of capital and competencies at seed stages and help them scale up meaningfully,” Wajid added.

Transition’s fund launch comes at a time when climate tech startups are slowly stealing the spotlight as nations around the world pledge to climate goals such as net zero emissions. 

At COP26, India pledged to achieve net zero emissions by 2070, and the country’s focus on areas such as emobility, energy storage and others has prompted investors to shift their focus towards startups working in this segment.

Earlier this month, early-stage focussed VC firm Merak Ventures and accelerator-led fund Huddle announced a climate tech-focussed accelerator programme, ClimAct. The two firms will support the shortlisted startups in the building and validation phase.

Along similar lines, VC fund Climate Angels launched special syndicates in August to help investors finance climate tech startups easily. Under these syndicates, Climate Angels, an angel investment syndication platform, will write cheques between INR 3 Cr ($375K) and INR 10 Cr ($1.2 Mn) in climate tech-focused startups over six years.

In April this year, agritech-focussed VC firm Omnivore launched its third fund worth $130 Mn with a renewed focus on climate sustainability.

According to Inc42 data, cleantech startups in climate tech, green energy, energy management and emobility have raised $1.76 Bn between 2014 and Q3 2022.