Mumbai: Private equity firm Apax Funds Wednesday said it has invested $200 million in data analytics firm Fractal Analytics Inc for a “significant minority” stake.
The investment values Fractal Analytics at around $500 million, two people aware of the matter said on condition of anonymity, though Apax did not reveal the exact stake it acquired.
The investment also marks the exit for Malaysian sovereign wealth fund Khazanah Nasional Berhad and TA Associates. The Apax investment also includes primary fund infusion into the company.
Khazanah had invested $100 million in Fractal in 2016, while TA Associates invested $25 million in 2013.
Mint was the first to report on 4 January that Apax Partners was looking to invest $200 million in Fractal Analytics.
Fractal Analytics will use the money for both organic and inorganic expansion.
Srikanth Velamakanni, co-founder, group chief executive and executive vice-chairman of Fractal Analytics said that the firm will be looking to acquire companies specializing in data engineering, design and behavioural sciences and artificial intelligence. “We will be looking to acquire companies with revenues ranging between $2 million and $50 million,” Velamakanni said, adding the idea is to scale up and get to a billion dollar in revenue.
Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, Fractal Analytics works as a strategic analytics partner to several Fortune 500 companies by bringing analytics and artificial intelligence to the decision-making process. Fractal has more than 1,200 consultants spread across 15 global locations including the US, UK and India.
Fractal will also look to scale up its own AI ventures. “We will be looking to spend at least 10%-12% of our revenue in funding these startups and scaling them up,” said Velamakanni. Some of the AI-led startups built by Fractal Analytics include 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.
Rohan Haldea, partner at Apax Partners, said: “The data and analytics sector is attractive and growing rapidly as companies increasingly see it as a core strategic function of their business. We are delighted to partner with Fractal Analytics who are extremely well-regarded in this space due to their cutting-edge advanced analytics and AI capabilities which help their blue-chip client base solve complex problems.”
Investment in Fractal Analytics is the 12th technology investment by Apax Partners globally. Some of its other technology investments include GlobalLogic, Zensar, ThoughtWorks and EVRY.
“Notably, its (Fractal Analytics) ability to attract high-quality data science and engineering talent has allowed the company to stay at the forefront of the rapidly-evolving analytics space,” said Shashank Singh, partner at Apax Partners.