Nearing Rs 1,300 Cr in revenue, Fractal slides into losses in FY22
- ByStartupStory | December 28, 2022
Fractal, a company that develops artificial intelligence, joined the unicorn club after receiving $360 million from TPG in January of this year. The 22-year-old company’s $1 billion valuation came after it experienced a respectable increase in revenue that came close to Rs 1,300 crore in FY22.
However, as personnel and legal expenditures increased faster than sales growth, the company sank into losses. In the second part of the narrative, we will examine Fractal’s costs and losses. For the time being, focus on the revenue side. According to the company’s consolidated financial accounts filed with the Registrar of Companies, its operational scale increased by 48.3% to Rs 1,295 crore in FY22 from Rs 873 crore in the prior fiscal year (FY21).
With its flagship products, the Mumbai- and New York-based company powers the retail, healthcare, technology, finance, and insurance industries with artificial intelligence and analytics. Theremin.ai, Eugenie.ai, Samya.ai, Qure.ai, Crux Intelligence.
96% of the total revenue, which increased 44.1% to Rs 1,244 crore in FY22, came from consulting and analytics services. Revenue from licensing and subscription fees increased fourfold to Rs 51 crore in FY22. Another Rs 19 crore was generated by financial instruments.
Employee benefits made up 74% of total expenses and increased by 72.7% to Rs 1,088 crore in FY22 from Rs 630 crore in FY21 in terms of price. For context, the company employs approximately 3,500 people in 16 different countries throughout the world, including the US, UK, Ukraine, India, and Singapore.
The second-largest expense ended up being legal and professional expenses, which increased by 73.5% to Rs 85 crore in FY22. In the previous fiscal year, Fractal increased its entire cost by 73.7% to Rs 1,461 crore by adding Rs 28 crore each for insurance and software maintenance fees.
The company has fallen into losses of Rs 148 crore in FY22 compared to a profit of Rs 36 crore in FY21 due to a substantial increase in overall expenses. Its ROCE and EBITDA margins also went down, by 9.26% and 4.91%, respectively. In terms of individual rupees, Fractal spent Rs. 1.13 to make one rupee in FY22.
MuSigma, Tredence, and Quantiphi Analytics are competitors of Fractal. It also intends to go public at a valuation of $2.5 billion; however, no exact date has been provided by the business for the IPO.
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