Physis Capital reaches its first close of CAT II $50M fund

Growth stage focused Physis Capital reaches its first close of CAT II $50 million fund, raising $7 million. The firm remains on track for its final close in 2024. Physis Capital is now actively seeking investment opportunities from its first fund, targeting startups in the Pre Series A to Series B stages of funding, with plans to deploy capital by Q3 2023.

Physis Capital’s investment strategy will be focused on identifying companies with solid business models that are able to generate sustainable returns in the long term. The firm avoids startups with high cash burn, high capex requirements, and low customer stickiness.  Being a sector-agnostic fund, Physis Capital seeks to create a portfolio of 15-20 startups, with an average investment size of $2.5 million.

Ankur Mittal, Partner, Physis Capital says, “We have seen investors interest remaining steady with respect to startup investments in the Indian startup ecosystem. ‘Smart money’ i.e. experienced investors realise that downturn economic cycles are the best times to identify great businesses and invest in them. Hence, 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. Physis is led by a strong investment team with deep experience in funding and supporting startups over the last 5 years and that has generated strong returns for its investors.”

Mitesh Shah, Partner, Physis Capital says, “While 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.  Along with these international funds, we are in the process to raise funds from institutions and commence deployment.”

Vinay Bansal, Partner, Physis Capital says, “Our biggest strength will continue to be the support we offer to our startups post investment – helping them attract good talent, build partnerships, generate revenue opportunities, strong focus on cost management and compliance, and support future debt and equity funding rounds using the deep relationships built with different stakeholders in the startup ecosystem”

The fund will also focus on strong deal sourcing and pipeline building strategy which would be a key driver to Physis’ success in accessing unique opportunities to invest. The Due Diligence will be done through a proprietary 200+ point checklist across business quality, founders’ abilities, supply chain, scalability, competition, differentiation factors and many more. Each investment due diligence, led by the experienced Physis team with support from renowned subject matter experts from the extensive CXO network built over the years would help in delivering outstanding returns to the investors.