IPO-bound AI company Fractal bags $170 million at $2.44 billion valuation

Artificial intelligence (AI) analytics firm Fractal Analytics has raised $170 million (about Rs 1,461 crore), valuing the company at $2.44 billion (Rs 20,978 crore). The public markets-bound firm made a secondary sale of 6% equity by its long-time investor Apax Partners.

The buyers include 22 investors and funds advised by Trust Investment Advisors, as well as funds managed by White Oak Capital Management, Gaja Capital and Neo Asset Management, it was reported by a news channel.

The unicorn is eyeing to list on the exchanges following an initial public offering (IPO) worth $400-$500 million which could value the company close to $3 billion, ET had reported previously.


The company has hired the bankers Morgan Stanley, Kotak Securities and Axis Securities and the draft red herring prospectus is expected to be submitted to the markets regulator. The offer will be a mix of primary and secondary share sale, with some of the investors partly selling their stake.

“When Fractal raised its last round in 2023 by TPG Capital, it was valued at $1.55 billion, and this was in fact before the company ventured into GenAI solutions and services,” said an executive, who did not wish to be identified. “While it is early to comment on the exact valuation, it will be a healthy multiple of Fractal’s last round.”

The person further said, “Early-stage investors such as Apax Partners and Khazanah Nasional Berhad (Government of Malaysia) who have been associated with Fractal for six-odd years may be looking at an exit while TPG, which is fairly new, will partly offload its stake.”

The firm has so far raised $855 million.

The fresh funds will be invested in expanding the company’s generative AI services portfolio, research and development, global expansion and pre-payment of some existing loans, said people in the know.

Founded by Srikanth Velamakanni and Pranay Agrawal in 2000, Fractal Analytics operates in the areas such as computer vision technologies, machine learning, quantum computing, cognitive automation and conversational AI.

It has business operations in the United States (which accounts for 70% of its revenues), followed by Europe (20%) and Australia, Middle East and India (10%).

Fractal Analytics started off in GenAI with its digital sales advisory solution Flyfish, conversational AI solution Fractal GPT and data science agent Arya. Most recently, it developed India’s first text-to-image diffusion model Kalaido.ai, which claims to generate high quality images from text prompts in English and Indian languages and may be launched in two weeks, according to the company.