SAM, AZB represent Fractal Analytics, Apax Funds in $200m investment deal

Funds advised by Apax Partners (the “Apax Funds”) had on January 16 announced a definitive agreement to invest USD 200m for a significant minority stake in Fractal Analytics, a global provider of AI to Fortune 500 clients. The transaction, which consists of a secondary stake acquired from existing shareholders and a primary investment into the business, is expected to close by February 2019.

The investment will accelerate Fractal’s path to a $1 billion-revenue company in the AI space. Fractal will use the investment by the Apax Funds to accelerate growth, both organically and through M&A, and to invest further in AI products and research.

Srikanth Velamakanni, Co-founder, Group Chief Executive and Executive Vice-Chairman of Fractal Analytics, said in a Press Release, “We are making progress on our goal to build a $1 billion-revenue company in the AI space thanks to our relentless focus on serving Fortune 500 companies globally in enabling an AI-led digital transformation in their businesses. We have been fortunate to have the backing of supportive investors in Khazanah Nasional, TA Associates, and Gulu Mirchandani in this journey. We are excited about our new partnership with Apax Partners, who have an enviable track record of building scaled new-age tech services companies.”

Pranay Agrawal, Co-founder and CEO of Fractal Analytics, said in the Release, “The demand for AI is surging across the enterprise. Our AI solutions and globally-recognized team of experts empower these organizations to realize and maximize their full potential. The investment from the Apax Funds will accelerate our ability to scale and meet this rising demand globally. It also establishes Fractal Analytics as one of the world’s most well-funded AI providers.”

Rohan Haldea, Partner at Apax Partners, said in the Release: “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. Srikanth and Pranay have done an excellent job building a differentiated company with a clear vision. We look forward to working with them to scale the business further.”

Shashank Singh, Partner at Apax Partners, said in the Release: “We are keen to partner with successful companies, like Fractal Analytics, that have become global leaders. Fractal’s strong culture, which fosters employee engagement and innovation, has played a significant role in driving its success. Notably, its 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.”

LAW FIRMS INVOLVED:

Fractal Analytics was represented by Shardul Amarchand Mangaldas & Co (SAM). The team included SAM’s private equity team of Partner Abhishek Guha, Principal Associates Ankit Kejriwal and Anwesha Haldar, and Associates Keegan Pavrey and Neekesh Shetty. In addition, compliance and trademark-related issues were managed by Partner Radhika Dudhat Pereira and Principal Associate Priyanka Sheth. Latham & Watkins acted as US Counsel to Fractal.

Apax Funds was represented by AZB & Partners. The team included Partners Ashwath Rau and Divya Mundra and Senior Associate Pranav Atit. The non-Indian law aspects for Apax Funds were handled by Kirkland & Ellis.