Private equity firm Apax Partners is in talks to pick up a majority stake in Fractal Analytics, making it one of the biggest shareholders in the analytics company.
Bengaluru, 04 Jan, 2019. RedNewswire/-
Fractal Analytics is in advanced talks to raise a little over $200 million from private equity firm Apax Partners, said two people aware of the development, requesting anonymity.
Apax will be buying out existing shareholders — Khanzanah Nasional Berhad and TA Associates and will infuse fresh capital in the company to support the balance sheet for the future acquisition deals, the report said citing unidentified people aware of the development.
Fractal Analytics was set up in 2000 by five graduates of the Indian Institute of Management, Ahmedabad, with each pooling Rs 2 lakh. It raised $60,000 from angel investor Gulu Mirchandani of Mirc Electronics, who has chosen to remain invested. Of the original five, only two — Srikanth Velamakanni and Pranay Agrawal — remain. They, along with other employees, own about 38% of the company.
The company’s services include products such as Cuddle.ai, a cloud-based web and mobile app to deliver AI-driven business intelligence; Qure.ai, for healthcare radiology, and Trial Run, an experimentation platform to help companies ‘test and learn’ to improve strategic and operational decisions.
Fractal Analytics uses artificial intelligence-powered data analysis tools to help corporates across a wide range of industries optimize and reinvent their businesses.
“Fractal is raising an investment round for a significant minority stake with the idea of accelerating its growth and creating one the most well funded AI services providers in the world. The investment is in line with Apax’s philosophy of backing next-gen tech leaders. Fractal is poised to become the market leader in analytics,”said the first person cited above.
Fractal will use the capital to acquire companies to supplement its organic growth strategy with inorganic growth, the second person cited above added. “Fractal is actively looking for M&A opportunities to supplement its high organic growth rate of over 40% over last seven successive quarters. Fractal’s goal is to build the first $1 billion revenue company in the AI space,” he said.
The deal is likely to be signed next week, one of the people cited above said. The deal will value the data company Fractal Analytics between $350 and $400 million.