Transition Ventures closed a $150M ($137.9M) Fund II to back "physical AI" startups across Europe and the US. The London-based firm, co-founded by Unity’s David Helgason, reaches more than $300M in total assets under management with this vehicle. The fund invests from pre-seed to Series A, providing initial cheques ranging from $1M to $8M.
The firm is shifting its investment thesis away from pure climate-tech toward the intersection of artificial intelligence and industrial infrastructure. The new fund targets companies building hardware and systems essential for the AI era, including semiconductors, small modular nuclear reactors for data centres, and autonomous systems for wildfire suppression. This strategic reframe follows the high-profile collapse of carbon removal startup Running Tide, a previous portfolio company.
Existing investments under the new framework include London-based photonics chipmaker Olix and Applied Atomics, which develops nuclear microreactors to power high-compute facilities. The firm also maintains holdings in more traditional green infrastructure, such as refurbished e-bike platform Upway, which has reported significant revenue growth since 2022. Transition operates with a concentrated portfolio strategy, focusing on fewer deals with deeper operational involvement.
As European deep tech funding continues to mature, specialist firms are increasingly moving toward industrial hardware to address the massive energy and compute requirements of the next decade's technology stack.
Originally reported by Tech Funding News.