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Mu Sigma attracts massive traction from global investors to acquire significant minority stake

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According to multiple reports surfacing on the web, a host of global investors are eyeing a juicy piece of the leading big data analytics firm Mu Sigma. The company’s CEO Ambiga Subramanian and current investor General Atlantic Partners are looking to sell a reported 30-40 per cent stake at a valuation of around $1.5 billion, report sources close to the development.

The sources also say that investment banks — Credit Suisse and Citigroup — mandated by Mu Sigma have reached out to potential global pension funds, private equity and sovereign wealth funds seeking their preliminary interest in the opportunity. And who all are reported to be saying yes to the offer?

PE funds Blackstone, Bain Capital, CVC Capital and Warburg Pincus are the potential heavy-weight bidders for a minority stake in the company. They also face some serious competition from Canada’s Ontario Teachers’ Pension Plan (OTPP) and Canada Pension Plan Investment Board (CPPIB). But, the key player that is also participating in the stake acquisition includes U.S-based analytics firm Palantir Technologies.

One could easily relate these sudden negotiations to the marital split between the two leading members, Subramanian and founder Dhiraj Rajaram. Both of them hold a 24 per cent stake in the company, and are planning to fetch as much as $600 million based on the final valuation, from the reported stake sale. But Subramanian may keep a part of her stake and step down from the executive role going forward.

Sources say that interested investors have submitted their initial bids last week, while the company has denied any plans of the same. In response to a detailed questionnaire mailed by ET, a Mu Sigma spokesperson said,

Mu Sigma would like to maintain that the points raised in the mail are untrue

And the statement received by us, The Tech Portal follows along the same lines and says,

Mu Sigma would like to maintain that there is no fact to the news.

On the other hand, Palantir and the PE buyout funds are wary of the negative news flow about the company and are adamant on acquiring a majority controlling stake. This stake sale could also fulfill Rajaram’s interest in raising more financing for the company.

Founded in 2004, Mu Sigma is a big data analytics firm that helps companies institutionalize data-driven decision making. It is headquartered in Chicago with substantial operations in Bengaluru. It has raised a total of $178 million in equity funding in three rounds from General Atlantic, MasterCard, and Sequoia Capital.

It is one of the rare Indian unicorns which has been profitable since inception and has clients which include as many as 140 ‘Fortune 500’ companies, namely Microsoft, Walmart, Dell and many others. It reported a revenue of Rs. 684 crores($110 million) and a whopping Rs. 380 crores($56.5 million) profit in the financial year 2014-15.

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