Physis Capital hopes to start investing in promising startups by Oct

Venture capital fund Physis Capital expects the first closure of at least USD 10-15 million from investors over the next four months and reach its target of USD 50 million in one year, while deployment of capital into promising startups could begin as early as October this year, a top official said.

CXO-driven angel investment platform Inflection Point Ventures (IPV) had announced its fund Physis Capital earlier this year to invest in startups looking to raise Pre Series A to Series B capital. The fund, which aims to build a portfolio of 15-20 startups with minimum ticket size of USD 2 million, has recently received approval from Securities and Exchange Board of India (Sebi).

"Physis Capital may be new, but not angel investment platform IPV. We have proven ourselves over the last four years...and that is where commitments have come in for Physis Capital," Ankur Mittal, Partner, Physis Capital, told PTI.

The new fund will have a corpus of USD 50 million with a greenshoe option of another USD 25 million. It will actively invest in sectors like vertical commerce, consumer tech, social/content creator, business to business SaaS (Software as a Service) and enterprise tech.

Physis Capital will also invest in companies in IPV portfolio. As much as 50 per cent of the fund size will be deployed in startups within the IPV portfolio.

"While at IPV, we typically do seed to pre series A (round), in case of Physis Capital we will be writing pre series A to Series B cheques," he said.

According to Mittal, many family offices as well as large investors have shown interest in Physis Capital.

"We are confident we will be able to close the initial amount in about four months, primarily because of some active inbound interest already received," Mittal informed.

The first milestone from here on will be securing closure of about USD 10 to 15 million.

Physis Capital has its eyes on lucrative investment opportunities and some of the investors have already given their commitment.

"They agree that these are great opportunities. So we may actually go for the first close in about four months instead of typical 6-7 months' time. That's what we are targeting," Mittal said, adding that while more clarity will emerge in the next few weeks, the fund expects to start deployment of capital latest by October this year.

"However, there are certain businesses we will avoid. We don't want to fund capex-heavy businesses or businesses which don't have a positive unit economics for a long term," he clarified.

Companies focused on social content would be an area of interest, so far as deployment of capital is concerned.

"...because we still believe that there's a lot of scope in social content yet to be seen, especially in India. And some of the startups in that space have done very well," Mittal explained.

The total amount of USD 50 million will be deployed by Physis Capital in the next three years.