TA Associates to invest Rs 150 crore in Fractal Analytics

Published By : The Economic Times

MUMBAI: American private equity fund TA Associates is set to invest 150 crore to pick a minority stake in Fractal Analytics, a Mumbai-based data analytics provider, which helps companies on pricing and product strategies.

“Fractal fits well into our global strategy of backing promoters who have managed to build a niche business services company to a scale and have global ambitions,” said Naveen Wadhera, director and country head in India for TA Associates, which manages $18 billion globally. “We have been very selective in investing in India and have been investing in just one-two companies every year,” Wadhera said.

Fractal Analytics helps financial institutions, consumer companies and retailers to understand consumer behaviour and consults companies on their various products and pricing strategies. Founded by former investment bankers Srikanth Velamakanni and Pranay Agrawal in a one-bed apartment in a Mumbai suburb in 2000, the company now employs 600 executives in seven offices across the world.

The company posted revenues of about $20.5 million in 2012-13 and expects to touch $35 million this fiscal. It has almost tripled its revenues from just $7 million in 2011. “Almost all our revenues come from global Fortune 500 companies,” said Srikanth Velamakanni, group chief executive officer of Fractal Analytics.

The company will use the capital to expand to other countries, grow its sales team and build more products with intellectual property rights. “Since the company is profitable and is generating cash, we would not need more capital in the immediate future,” said Velamakanni.

The total Big Data market, which clocked $11.4 billion in 2012, is projected to reach $18.1 billion in 2013, growing at 61% and exceed $47 billion by 2017, according to Wikibon, an American firm that tracks data. “That translates to a 31% compound annual growth rate over the five-year period 2012-17.”

TA expects data analytics to grow exponentially and help companies such as Fractal expand manifold in the coming years. “We believe the big data space represents a very significant opportunity as companies have understood the power of data-driven decision-making, but are struggling to operationalise and institutionalise analytics inside their organisations,” said Wadhera, who will join the board along with Kenneth T Schiciano, TA Associates’ MD from Boston.

Investment bank Avendus Capital was the sole financial advisor for the transaction.