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Growth stage-focused Physis Capital, the venture capital arm of angel network Inflection Point Ventures, has reached the first close of its maiden fund at $7 million, almost a year after launching the CAT II $50-million fund.

The fund is on track to make the final close of the fund in 2024, said the company.

Physis Capital will invest in startups looking to raise pre-Series A to Series B capital by the third quarter of 2023.

“We have seen investor interest remaining steady with respect to startup investments in the Indian startup ecosystem. Hence, we’ve received good interest in the past few months, especially from new investors who are backing the GPs (general partners) and investing with us for the first time, looking at our track record,” said Ankur Mittal, Partner, Physis Capital.

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

“Along with these international funds, we are in the process of raising funds from institutions and commencing deployment,” he added.

Physis Capital, which is a sector-agnostic firm, invests in pre-Series A to Series B startups. The fund aims to craft growth stories through an integrated ecosystem consisting of technical, operational, and strategic mentorship along with funding.

The Gurugram-based firm aims to focus on strong deal sourcing and pipeline building strategies, which would help access unique opportunities to invest in.

The due diligence will be done through a proprietary checklist, with more than 200 points, including business quality, founders’ abilities, supply chain, scalability, competition, and differentiation.

Each investment’s due diligence will be led by an experienced team with support from renowned subject matter experts, from the extensive CXO network built over the years, said the company.

The firm is looking to build a portfolio of 15–20 startups, with an average ticket size of $2.5 million.

Physis Capital said it will identify companies that have a solid business model and are likely to generate sustainable returns in the long term and avoid those with high cash burn, high capex requirements, and low customer stickiness.