How Fractal, India’s first AI unicorn, is prepping for the next race

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he started Fractal. All the co-founders pooled in about ₹2 lakh each. “I got my ₹2 lakh from my mother.

A few other friends sent us $10,000 cheques, and Sasha Mirchandani (managing director and founder of Kae Capital and co-founder of Mumbai Angels) invested about $400,000, which helped us start the engine," he recalled. The next decade proved to be stressful. He co-founded Fractal in 2000, at the peak of the dotcom bubble—many companies started closing down.

Then came the split with the co-founders. The company also worked with very little external capital. After Mirchandani’s investment, Fractal didn’t raise any more money till 2013 when TA Associates invested $45 million.

Meanwhile, Fractal battled to establish its own identity. None of the co-founders were thinking of building an analytics company when they started. “We only wanted to help customers make better decisions when buying devices, appliances, etc.," said Velamakanni.

Soon, the co-founders realized that the company wouldn’t make much money with this approach. They pivoted into an analytics firm to help enterprises make better decisions using data, math, human psychology, and so on. While there were firms like Fair, Isaac and Company that were into building risk models for companies, the concept of analytics didn’t really exist back then, said Velamakanni.

An initial business came from ICICI Bank where Fractal was tasked with building a scorecard to automate lending. Then, the company worked with Hindustan Unilever, helping it “understand consumer buying behaviour through the lens of data". But Fractal faced a big challenge.