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TPG arm to invest $360 mn in Apax Partners-backed Fractal Analytics at unicorn valuation
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Global private equity firm TPG has inked a pact to invest $360 million (Rs 2,700 crore), through its Asia-focused private equity (PE) platform TPG Capital Asia, in Apax Partners-backed Fractal Analytics, a company that taps artificial intelligence to offer solutions to top global companies.   

The transaction, which is expected to close by the first quarter of 2022, includes a combination of primary investment and secondary share purchase from funds advised by Apax Partners, Fractal Analytics said in a statement on Wednesday.

Apax Partners will remain a major shareholder after the transaction, the company said, without disclosing further financial details of the deal.   

As part of the deal, TPG's Puneet Bhatia and Vivek Mohan will join Fractal Analytics's board of directors, while all the existing directors including Gavin Patterson, Rohan Haldea, Shashank Singh and Gulu Mirchandani will continue to be on the company’s board.   

Founded in 2000, Fractal Analytics provides business analytics services through big data.

The company offers marketing analytics, forecasting, pricing and promotions optimisation services and consumer insights. Fractal Analytics caters to retail, insurance, technology, financial services and consumer goods sectors.  

The company has products like Qure.ai, a platform that assists radiologists during diagnostics; Crux Intelligence, a platform helping senior executives in making strategic decisions; Theremin.ai, which helps in investment decisions; Eugenie.ai, which finds anomalies in high-velocity data; Samya.ai, a platform providing solutions on revenue growth management, which Fractal Analytics had acquired last year; Senseforth.ai, which automates customer interactions and Analytics Vidhya, a community offering industry-focused training programmes.

Fractal Analytics claims to count a few Fortune 500 companies as its clients.

"We continue to see great momentum in how clients are leveraging AI to accelerate digital transformation. Fractal is building a great workplace and an innovative culture that's driving significant client outcomes through our ‘user focused, decision-backwards’ approach to solving problems," said Srikanth Velamakanni, Co-founder, Group Chief Executive Officer, Fractal Analytics.  

Fractal Analytics claims to have more than 3,500 employees across 16 global locations including the US, the UK, Ukraine, India, Singapore, and Australia.

The company, founded by Indian Institute of Management Ahmedabad graduates Velamakanni, Pranay Agrawal, Nirmal Palaparthi, Pradeep Suryanarayan and Ramakrishna Reddy, has an office in New York, and had shifted its headquarters to San Francisco from Mumbai.

Suryanarayan and Reddy had left in 2007 after a dispute among the founders while Palaparthi quit in 2012 to start his own venture.

In October 2020, in an exclusive interaction with VCCircle, Velamakanni had said that the company is creating a startup culture within the company and compared the firm’s path and its startup culture to that of Google’s, pointing out how the search engine became a home to a diverse product portfolio.

The company had raised $200 million in 2019 from Apax Partners for a significant minority stake through a mix of primary and secondary share sale.

“Apax has been a great partner to us as we have worked to grow our business, providing valuable insights from their tech experience, operational leadership, and access to their unique network. As we continue to build upon this foundation, the investment from TPG will accelerate our ability to scale and meet this rising demand globally,” said Pranay Agrawal, Co-founder, Chief Executive Officer, Fractal.

Fractal Analytics’ investment adds to the software and enterprise portfolio of TPG. The private equity firm has been actively investing in companies providing AI solutions. Some of the private equity firm’s portfolio companies include C3 AI, Digital.ai, LLamasoft, MX, Noodle Analytics, and Onfido.

"In the growing market for data and analytics services, Fractal continues to stand out as one of the most well-established, differentiated providers and a clear leader in AI and advanced analytics," said Puneet Bhatia, Co-Managing Partner of TPG Capital Asia.

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