Fractal Bags INR 49 Cr From Cofounder Srikanth Velamakanni

SUMMARY

Cofounder and CEO Srikanth Velamakanni made the investment for the conversion of his partly paid-up equity shares into fully paid-up equity shares

Fractal also approved the allotment of 1.32 Lakh equity shares to as many as 81 employees under its ESOP scheme last month

Fractal is preparing for its public listing and is looking to file its DRHP in August for a $500 Mn IPO

IPO-bound SaaS unicorn Fractal Analytics’ cofounder and CEO Srikanth Velamakanni has invested INR 48.7 Cr (about $5.6 Mn) in the company.

As per the company’s regulatory filings, Velamakanni made the investment for the conversion of his partly paid-up equity shares into fully paid-up equity shares.

The company’s board approved the conversion of 6.6 Lakh partly paid-up equity shares held by Velamakanni into fully paid-up equity shares at an issue price of INR 733 each, amounting to INR 48.73 Cr.

In a separate filing, the company said it also approved the allotment of 1.32 Lakh equity shares to as many as 81 employees under its ESOP scheme last month.

Queries sent to Fractal around the developments did not elicit any response till the time of publishing this story.

Founded in 2000 by Velamakanni and Pranay Agrawal, Fractal offers AI and advanced analytics solutions to enterprises globally. It counts the likes of Google and Wells Fargo among its clients.

It earns revenue from analytics and consulting services, and licence and subscription fee for its proprietary AI products and platforms.

Fractal’s product suite includes enterprise agentic AI platform Cogentiq, GenAI-powered recruiting platform Iqigai, text-to-image generator Kalaido.ai, AI-powered executive coach Marshallgoldsmith.ai, AI health assistant Vaidya.ai, GenAI tool for sales Flyfish.ai, AI platform for revenue growth Asper.ai and AI solution for medical imaging Qure.ai.

Fractal Gears Up For IPO

The investment by the cofounder comes at a time when Fractal is preparing for its public listing. The company is looking to file its DRHP in August for a $500 Mn IPO.

The company has reportedly onboarded Morgan Stanley, Kotak Mahindra Capital, and Axis Capital as the bankers for the public issue.

Notably, this would be the second attempt by the SaaS major to launch an IPO. Fractal declared plans to go public in 2021 but deferred the IPO amid weak market conditions.

It has raised a total funding of over $685 Mn to date and counts TA Associates, TPG, and Malaysia’s Khazanah Nasional Berhad among its backers. Some of these investors may pare their stake via OFS in the IPO.

On the financial front, Fractal slipped into the red in FY24. It posted a net loss of INR 54.7 Cr during the year as against a profit of INR 194.4 Cr in the previous fiscal. Revenue grew 11% to INR 2,196.3 Cr in FY24 from INR 1,985.4 Cr in FY23.

The company is also undertaking several R&D initiatives and product launches to ramp up its revenue. Earlier this year, it submitted INR 150 Cr proposal to the IndiaAI Mission to build a multimodal medical foundational model and also announced plans to build India’s first large reasoning model (LRM) with a total investment of INR 118 Cr.