Physical World Research
Investment Thesis
Physical World is an early-stage venture capital fund built on the conviction that "software isn't enough anymore." The firm argues that the last decade of AI progress was built around software — models that write, reason, search, recommend, and generate — while the next decade moves into the physical economy, where labor is scarce, systems are fragile, and the stakes are high. Physical World backs Physical AI founders across the critical industries that define civilization: supply chain, labor, aerospace, energy, and resilience. The firm was founded by Kelly Chen, who spent the prior decade as a board member and investor in Physical AI companies, most recently as a Founding Partner of the $1B NATO Innovation Fund and, before that, as an early partner at DCVC through its growth to $4B AUM, where she led investments in robotics and industrial transformation.
Sector Focus
The firm focuses on markets shaped by chokepoints rather than trends: labor shortages, fragile supply chains, energy constraints, productivity flatlines, and national security challenges. Named verticals include supply chain, manufacturing, labor, aerospace, energy, industrials, and resilience. The site frames the opportunity broadly as companies that "move goods, generate power, manufacture materials, coordinate fleets, secure infrastructure, extend human capacity, and rebuild the physical world" — spanning robotics, industrial automation, energy, semiconductors, logistics, aerospace, advanced manufacturing, and critical infrastructure.
Stage Focus
Physical World partners at pre-seed and seed with a small number of companies each year. The firm backs founders early, "often before there is a company to announce," focusing on foundational decisions: which market to enter first, which wedge is economically urgent, what product architecture can scale, which customers matter, and which deep-tech milestones unlock follow-on funding.
Check Size
Initial checks are $1–2M.
Lead Tendency
Not explicitly stated on the site. The firm emphasizes "high conviction ownership from day one" and direct GP access, but does not describe itself as a lead or follow investor, so this is recorded as unknown.
Recent Activity
Physical World appears to be a newly launched fund (Kelly Chen's public statements describe her as "launching a new fund" after departing the NATO Innovation Fund roughly a year prior to this research). No specific post-launch portfolio investment announcements with independent sourcing were found during this research pass. Kelly Chen was named one of Business Insider's "22 Investors to Know in Robotics and Physical AI" in June 2026, which is the most recent independently verifiable public activity found for the firm.
Portfolio Highlights
The site's "Experience" page lists 14 companies under the heading "Companies that shaped our conviction," described as representing embodied intelligence, infrastructure, materials, logistics, autonomy, and critical systems: SafelyYou, Agility Robotics, Pickle Robot, Fulfil Solutions, Recycleye, Tekever, BurnBot, iCOMAT, Kongsberg Ferrotech, Aquark, Smartex, Brimstone, Portal Bio, and Kepler Communications. Independent sourcing (a June 2026 Business Insider profile of Kelly Chen) confirms that Agility Robotics, Fulfil, and Recycleye were investments she led or participated in during her time at DCVC — i.e., these are best read as track-record / conviction companies from the founding team's prior funds, not confirmed Physical World fund investments, since the firm is newly launched. This distinction should be treated as a research gap until Physical World discloses its own deal-by-deal portfolio.
Team
- Kelly Chen, Founder | Managing Partner — Former early partner at DCVC (grew to $4B AUM), where she led robotics and industrial-transformation investments. Founding Partner of the $1B NATO Innovation Fund, a standalone early-stage fund backed by 24 nations investing at the intersection of deep tech, critical infrastructure, and national security. Earlier, a bond trader in New York overseeing $1.8B at Barclays. Two engineering degrees from Columbia and an MBA from Wharton.
- Charlie Muirhead, Venture Partner — Serial entrepreneur and CEO; founder of Orchestream (NASDAQ IPO), Rightster (AIM IPO), Nexagent (sold to EDS), and iGabriel (sold to Pi Capital). Two-time World Economic Forum Tech Pioneer and co-founder of CogX, a global AI community of 100,000+ members.
Decision Process
The firm advertises "direct access to the GP, no committees," and a two-week decision target, consistent with a solo-GP-style decision process centered on Kelly Chen.
Founder Preferences
The firm looks for exceptional technical insight, "uncomfortable ambition," and founders in North America and Europe ("not local maxima") building products that become infrastructure, in markets shaped by chokepoints rather than trends. Every founder backed participates in GP carry.
Geographic Focus
The firm describes access to "a global network across industry, government, and funding, from Silicon Valley to Europe." Both named team members carry UK LinkedIn profiles, and Charlie Muirhead's prior companies (Orchestream, Rightster, CogX) are UK-based, suggesting a London anchor with a US/Europe cross-border remit; this location is not explicitly confirmed on the site.
Track Record Signals
The firm cites that two-thirds of the founding team's prior early-stage companies are now backed by Tier-1 global venture firms, and that multiple prior portfolio companies scaled from pre-revenue to $100M+ customer contracts. Testimonials on the site come from Evangelos Zympeloudis (CEO, iCOMAT) and George Netscher (CEO, SafelyYou), both crediting Kelly Chen's board involvement and early conviction — again, from her time prior to founding Physical World.
