Physis Capital Announces First Close Of $50 Mn Fund

Growth stage-focused venture capital (VC) firm Physis Capital has announced the first close of its maiden Category II Alternative Investment Fund (AIF) at $7 Mn.

The VC firm said the fund’s total corpus was capped at $50 Mn and it targets 2024 for the fund’s final closure.

Physis Capital, set up by the founders of the early stage VC firm Inflection Point Ventures, is looking to build a portfolio of 15-20 startups with an average ticket size of $2.5 Mn via the sector-agnostic fund.

The VC firm added that it would start investing in startups looking to raise Pre Series A to Pre Series B from its first fund by Q3 2023.  Further, it would avoid investing in startups with high cash burn, high CAPEX requirements and low customer stickiness.

Ankur Mittal, partner at Physis Capital said, “We’ve received good interest in the past few months, especially from new investors who are backing the GPs and investing with us for the first time, looking at our track record.”

Mittal added that Physis is led by an investment team with experience in funding and supporting startups over the last five years and has generated strong returns.

Mitesh Shah, partner at Physis Capital added, “While the majority of funds raised by Physis Capital so far are from Indian investors belonging to HNIs and family offices, we are now receiving significant interests from investors across multiple international locations including Singapore, USA and UAE.”

Shah further noted that the VC firm is in the process to raise funds from institutions and start investing, along with the aforementioned international funds. The fund will also focus on a strong deal-sourcing and pipeline-building strategy, the VC firm said. 

Physis’ announcement comes as funds worth nearly $3 Bn have been launched/announced since the start of 2023, per Inc42 data.

Some of the recent fund announcements include 3one4 Capital closing its fourth early-stage investment fund at $200 Mn, Stride Ventures’ first close of its third venture debt fund at $100 Mn, Multiples PE’s $640 Mn fund close and Chiratae Ventures closing its Growth Fund I at INR 1,001 Cr (around $123 Mn).

The fund announcements indicate an increasing amount of dry powder available to investors as a funding winter continues to plague the Indian startup ecosystem. Per Inc42 data, Indian startups could only raise $888.45 Mn in funding in April 2023, down 66% year-on-year (YoY) compared to April 2022.