Exceptional Gain Helps SaaS Unicorn Fractal Post INR 194 Cr Profit In FY23

New York-based AI intelligence unicorn Fractal turned profitable in the financial year ended March 31, 2023. The TPG-backed SaaS company reported a profit of INR 194.4 Cr in FY23 as against a loss of INR 148.4 Cr in the previous fiscal year. 

The company would have been in loss in FY23 if not for a gain of INR 494.9 Cr from an exceptional item. As per the financial statement, Fractal made the exceptional item gain from the loss of control of a subsidiary company. 

Inc42 has reached out to the company seeking further details on this one-time gain. The story would be updated on receiving a response.

Without the exceptional gain, Fractal, which reported a profit of INR 36 Cr in FY21, would have reported a loss of INR 181.5 Cr in FY23.

Founded in 2000 by Srikanth Velamakanni and Pranay Agrawal, along with core team members – Nirmal Palaparthi, Pradeep Suryanarayan, and Ramakrishna Reddy, Fractal offers artificial intelligence and advanced analytics solutions to Fortune 500 companies.

Fractal took 21 years to enter the prestigious unicorn club when private equity firm TPG pumped in $360 Mn at a valuation of over $2 Bn. 

Fractal’s Cash Cow – The US 

Fractal’s operating revenue increased 53% to INR 1,985.4 Cr in FY23 from INR 1,295.3 Cr in the previous fiscal year. The startup primarily earns revenue by offering analytics solutions. 

• It generated INR 1,333.9 Cr from the US region, a jump of 56% from INR 852.9 Cr in FY22. 
• Fractal earned INR 346.7 Cr from the European region, an increase of 40% from INR 247.2 Cr in FY22.
• The APAC & others region, which includes India, too saw a robust growth in revenue. It made INR 304.8 Cr in revenue from this region, a jump of 56% from INR 195.2 Cr in FY22. 

Fractal, including other income, reported a total revenue of INR 2,043.7 Cr in FY23, a 55.5% increase from INR 1,314 Cr in the previous year. 

Where Did Fractal Spend?

Total expenditure surged 52% to INR 2,225.2 Cr in FY23 from INR 1,461.5 Cr in the previous fiscal year. 

Employee benefit expenses were the biggest contributor to the startup’s growing expenses. Fractal spent INR 1,767.2 Cr on employee benefit expenses in FY23, an increase of 59.5% from INR 1,107.9 Cr in the previous year. It spent INR 1,524.3 Cr on salaries in FY23 as against INR 1,030.8 Cr in FY22. As per LinkedIn, Fractal’s total employee count stands at above 4,500. 

Fractal also granted ESOPs worth INR 158.7 Cr in FY23 as compared to INR 21.9 Cr in the previous fiscal year. 

Fractal Analytics has raised a funding of around $680 Mn to date and counts TPG, Apax Partners, Khazanah Nasional among its investors. Its offerings include Qure.ai that assists radiologists, Crux Intelligence to assist CEOs and senior executives, Theremin.ai to improve investment decisions, among others.