According to a top official, venture capital fund Physis Capital expects to close its first round of funding of at least $10-15 million from investors in the next four months, and to reach its goal of $50 million in a year, while capital deployment into promising startups could begin as early as October this year.
Inflection Point Ventures (IPV), a CXO-driven angel investing platform, unveiled its fund Physis Capital earlier this year to invest in firms seeking pre-Series A to Series B capital.
The Securities and Exchange Board of India recently gave its clearance to the fund, which wants to establish a portfolio of 15-20 startups with a minimum ticket size of USD 2 million.
“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, said.
The new fund will have a corpus of $50 million with a greenshoe option of another USD 25 million. It will actively invest in 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 the IPV portfolio. As much as 50 per cent of the fund size will be deployed to 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 and prominent 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 will be to close a transaction worth around USD 10 to 15 million. Physis Capital is looking for profitable investment possibilities, and some investors have already committed.
“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 positive unit economics for a long term,” he clarified.
Companies focused on social content would be an area of interest so far as capital deployment 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 $50 million will be deployed by Physis Capital in the next three years.