Private equity firm TPG is investing $360 million in Bengaluru-based AI and analytics company Fractal. The value of the deal is at over $1 billion, making Fractal the second unicorn of 2022. The first was Mamaearth.

Fractal has raised $685 million in funding to date.

The latest funding is a combination of primary and secondary  share purchase from funds advised by Apax and both TPG and Apax will be minority shareholders in the company.

TPG's Puneet Bhatia and Vivek Mohan will join Fractal's board directors.

"A part of the primary investment would be deployed into R&a for products and in pursuing M&A deals," Srikanth Velamamakanni, co-founder and group CEO of Fractal said.

He said the firm deploys 15-20 per cent of the revenue into R&a &D each year and fractal is expected to close FY22 with Rs 1,400 crore in revenue, from Rs 800 crore last year.

“Apax is selling part of its stake while TPG is also entering. So it's going to be a balanced cap table with TPG and Apax along with Fractal founders and existing investors,” said Velamakanni. “The idea is to have a balanced set of shareholders as part of our long-term plan to be a public company.”

“"The fundraise will be used to further invest in products and for additional M&As. We have acquired five companies (Samya.ai, Zerogons, FinalMile, 4i and Imagna) in 2021 for about $100 million and hope to invest a similar amount in the future,” he said.

So, fractal has been investing about 15% of its revenue for M&A deals, Velamakanni said. Besides,  the company is also putting money into AI and Cloud solutions, it is also keen on adding to its design capabilities. The AI startup is targeting about $190 million revenue in FY22.