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Business challenges exacerbated by the pandemic have accelerated the adoption of big data analytics. Also referred to as “big data,” big data analytics is the use of analytic techniques against datasets from sources ranging from terabytes to zettabytes in size. Spurred by the promise of better and faster decision-making and modeling, companies were embracing data analytics platforms even before the health crises. According to Dresner, big data deployment in the enterprise reached 53% in 2017, up from 17% in 2015 — with telecom and financial services leading the early adopters.
A number of vendors compete in the growing big data analytics segment, including Noogata, Imply, Unsupervised, Pecan.ai, and Firebolt. Fractal Analytics is one of the larger players, providing big data services in the consumer packaged goods, insurance, health care, life sciences, retail, technology, and financial sectors. Fractal today announced that it raised $360 million in funding round led by TPG Capital Asia, bringing its total capital raised to date to over $685 million.
“Over the past two decades, Fractal has been able to define itself as not just an IT specific sale or tool, but as a go-to resource for any C-Suite technology decision maker that is looking to make their operations more efficient, agile and informed,” Fractal chief strategy officer Satish Raman told VentureBeat via email. “From health care to retail, Fractal has become a leading AI partner because of its ambition, drive and performance. And as more and more companies look to deploy AI amid the surge in digital transformation efforts, this funding will help us continue to be the primary port of call for any business that needs to make AI a success within their organization.”
Big data promise
The concept of big data has been around for years, but the emergence of new technologies and cheaper infrastructure has made it practical on a scale that wasn’t achievable before. At scale, analytics can help organizations harness their data and use it to identify new opportunities, ideally leading to reductions in cost and the creation of new products, platforms, and services.
Fractal, which was founded in 2000 by Srikanth Velamakanni, Pranay Agrawal, Nirmal Palaparthi, Pradeep Suryanarayan, and Ramakrishna Reddy, offers managed services that can turn volumes of text, images, videos, and speech into structured data for analysis. With a workforce of over 3,500 employees spread across 16 locations including the U.S., Ukraine, Australia, and India, Fractal delivers products including Theremin.ai, an intelligent investment advisor; the anomaly-finding Eugenie.ai; and Samya.ai, an enterprise revenue growth management tool.
Consultancy makes up the bulk of Fractal’s revenue-generating business. The company works with brands to build bespoke AI solutions, such as optimizing marketing spend by feeding an AI system point-of-sales data. Beyond custom creations, Fractal incubates a small but growing number of internal AI startups, a group to which it has devoted tens of million of dollars over the past several years.
Above: A portrait photo of Fractal Analytics CEO Srikanth Velamakanni.
A top performer is Qure.ai, a company based in Mumbai that developed an AI-powered algorithm to identify brain hemorrhages and bone fractures. Another is Trial Run, which provides an AI platform for testing and measuring businesses strategies. Yet another — Cuddle.ai — describes its product as a “voice-enabled analysis platform” that delivers contextually relevant business insights to employees.
Despite the potential of — and record investment in — big data analytics, some research paints a mixed picture of its return on investment. A 2021 NewVantage Partners report found that only 24% of executives believe their organizations have realized the goal of becoming data-driven, with cultural barriers including organizational alignment, business processes, change management, communication, people skill sets, and resistance or lack of understanding presenting the biggest hurdles.
Still, the global big data and business analytics segment could be worth approximately $684 billion by 2030, according to Valuates Reports — assuming that the current trend holds. Fractal competes with companies such as Tata Consultancy Services, Wipro, Tredence, LatentView, and Mu Sigma, the last of which is valued at over $1.5 billion and notched $165 million in revenue in 2016.
India remains the top outsourcing destination for analytics, with Indian companies including Fractal retaining a roughly 40% share of the market, according to market consultancy firm Zinnov.
Fractal has pursued an aggressive merger and acquisition (M&A) strategy in an effort to stay ahead of its best-performing rivals. In 2017, the company acquired Chicago-based strategy and analytics firm 4i Inc. and partnered with behavioral science platform Final Mile, which it later acquired. Fractal’s other buyouts between 2015 and 2018 include Imagna Analytics — a San Mateo-based data science company with a focus on ad targeting — and Singaporean personalized marketing startup Mobius Innovations.
Beyond venture investments, climbing revenue from big-name customers including Google and Wells Fargo enabled the M&As. Fractal anticipates revenue in the fiscal year 2022 will reach $250 million, a 37% increase from the $165 million with which the company expects to end the period between March 2021 to March 2022.
Fractal, which has its main offices in Mumbai and New York, says that it intends to explore an initial public offering in the coming months.
“This funding will be used to fuel further growth initiatives across the board — ranging from acquisitions to product growth and other strategic business investments…Fractal currently has in excess of 100 clients,” Raman added. “[W]e have seen an incredible jump in AI interest [during the pandemic], as well as an increased demand for Fractal’s tools and insights. Furthermore, from an operations perspective, [the pandemic] has opened up completely new ways of doing business that we never would have considered before. For example, it would have been hard to imagine two-and-a-half years ago that we would conduct acquisitions or other sensitive business without having met other partners in-person. Therefore, to say that the pandemic has been a period of growth, learning and evolution would be an understatement.”
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