Physis Capital, a growth-stage venture fund, has raised over 200 crore rupee (US$23.2 million), with the final close expected in the next six to nine months.

The fund, founded by Vinay Bansal, Ankur Mittal, and Mitesh Shah, targets technology-driven startups from pre-series A to series B stages.

It plans to build a portfolio of 15 to 20 startups.

Initial investments will range from US$1 million to US$1.5 million, with follow-on investments of up to US$4 million.

Notable backers include SUD Life, Haldiram’s Family Office, Lotus Holdings, and Narayana Nethralaya.

The fund has invested in Ben & Gaws, CTPL, and STAGE, a regional OTT platform creating content in Indian dialects.

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🔗 Source: Physis Capital

🧠 Food for thought

1️⃣ India’s VC landscape hits new maturity amid funding recovery

Physis Capital’s fundraising milestone occurs during a significant rebound in India’s venture ecosystem, with total VC funding reaching $13.7 billion in 2024, 1.4 times the 2023 levels 1.

This growth comes as India has established itself as the third-largest startup ecosystem globally, now home to over 140,803 DPIIT-recognized startups as of June 2024 2.

While the number of funded startups has declined globally, the size of funding rounds has increased substantially, reflecting a trend toward larger investments in fewer, more promising companies. This aligns with Physis’s selective portfolio approach 3.

The Indian VC market is showing particular resilience, with funding growing by 40% in early 2025 and deal volume rising by 11%, outperforming global markets where deal volume contracted by 9% during the same period 4.

Physis’s focus on Pre-Series A to Series B aligns with market shifts, as the median size of Series A rounds has grown from $3 million to $8 million between 2011 and 2018, indicating investors’ willingness to place larger bets on promising ventures 3.

2️⃣ Sector specialization and investment discipline becoming industry norms

Physis Capital’s strategic focus on specific sectors reflects a broader industry trend, as India’s consumer tech emerged as the largest funding recipient in 2024, with investments rising 2.3 times to $5.4 billion 1.

Technology-driven sectors like software and SaaS have seen funding increase by 1.2 times, with generative AI specifically growing by 1.5 times—aligning with Physis’s stated interest in tech-driven startups 1.

Investment standards have significantly tightened across the industry, with nearly 70% of Series A startups now generating revenue before funding, compared to just 15% in 2010. This aligns with Physis’s emphasis on startups that can “scale sustainably” 3.

The involvement of family offices and institutional investors in Physis’s fundraising reflects another industry trend, as these investor categories have increased their participation in venture deals across India’s ecosystem 1.

Physis’s leadership team’s extensive experience in scaling companies like Campus Shoes and Ola addresses investors’ growing focus on backing fund managers with proven operational expertise rather than just financial backgrounds 5.

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