Fractal Analytics may file DRHP next month; eyes $3 billion valuation for IPO

Fractal Analytics may file DRHP next month; eyes $3 bn valuation for IPO

Artificial intelligence and advanced analytics solutions provider Fractal Analytics, founded by four IIM Ahmedabad graduates, plans to soon file the draft red herring prospectus for an initial public offer (IPO) with the market regulator Securities and Exchange Board of India, sources aware of the development told Moneycontrol.

The analytics company is likely to file its draft papers by the end of the next month or early September, sources said, adding that the company is looking at listing on the Indian bourses at a valuation of around $3 billion.

The IPO size is likely to be in the range of $500-600 million and will comprise a large share of secondary share sales by existing investors.

Fractal counts marquee private equity investors such as TPG Capital and Apax Partners as its investors. The quantum of secondary stake sales is yet to be finalised and hence the final size of the IPO is still unclear, the sources said.

Moneycontrol was the first to report in March this year that Fractal had initiated discussions on its domestic IPO.

“We are actively monitoring market conditions and will certainly provide official updates on our IPO plans as the situation evolves,” said a Fractal Analytics spokesperson in an email response to Moneycontrol’s query.

$15 billion revenue goal

Founded in 2000 in Mumbai, the AI firm’s clientele includes Fortune 100 and 500 companies such as Google, Wells Fargo and Reckitt Benckiser. Fractal became a unicorn in early 2022 when it raised $360 million from TPG Capital Asia.

In an interview with Moneycontrol on March 6, Fractal co-founder and CEO Srikanth Velamakanni said that the company is aiming to become a $15 billion annual revenue company by serving the world’s 500 biggest companies.

“Eventually, our goal is to serve 500 of the largest companies on the planet and work with them. If they spend about $30 million with us annually, we can become a $15 billion company. We are not chasing valuation, but I think we have a path to becoming a $15 billion revenue company,” Velamakanni had told Moneycontrol.

Fractal's projects

He added that Fractal is working on several interesting innovations and new use cases of AI.

The startup is working on using quantum computing instead of traditional computing to increase the speed of AI manifold. Fractal is also exploring computational neuroscience and is researching how the human brain makes decisions and what it does right before arriving at one. The firm is also examining how AI can be used to help people significantly to make the right decisions quickly. Dronetech is another important area of development, Velamakanni said.