Since the turn of the millennium, Fractal has provided artificial intelligence services to a wide range of industries. From insurance to life sciences to the financial sector, the New York-headquartered company has served as an innovator of new AI-based capabilities that have driven their clients’ growth and helped them reach new levels of operational resilience and efficiency. With the worldwide need to apply AI-based technology in vertical industries increasing, private investors have taken notice and are eagerly making moves to be a part of the growing sector.
Fractal has held the attention of investors for some time, and has recently announced that its latest round of funding (the company’s fifth) is expected to close in the first quarter 2022, to the tune of $360 million. According to Crunchbase, the company’s funding total will reach $685 million with this newest investment from global alternative asset firm TPG, which invested in fractal via its Asia-focused private equity platform.
While the firm provides AI technology to a large variety of industries, it has developed a specialty in healthcare, building AI into diagnostic imaging systems like X-rays, CT scans, and ultrasounds. While its application of AI is relatively new, the company is making strides in tackling the early growth of the market. Its subsidiary Final Mile has begun working in the public health sector to use behavioral and data science to address COVID-19 vaccine hesitancy. It has built a machine learning model using social media data to determine at a granular community level where there are likely to be clusters of illness and low vaccination rates.
According to Dan Miller, an analyst at Opus Research, Fractal plans to use the new funding to identify and acquire firms that address opportunity markets it has targeted, including applying AI-driven human assistance to advanced diagnostics and healthcare product design. The firm acquired AI vendors Samya.ai and Zerogons in 2021 as part of this strategy.
The news may well portend a 2022 of significant funding for AI vendors, with analysis firms like IDC predicting a coming boom in investment in AI systems companies. As many small AI firms have a very specific focus, it makes a lot of sense for acquiring firms to take a roll-up approach the way Fractal has. While it remains to be seen whether or not the rest of 2022 will be a growth year for the AI market, at least one vendor is off to a strong start.