Data analytics firm: Mu Sigma founder Dhiraj Rajaram buys back shares via investors Sequoia and General Atlantic
- ByStartupStory | April 22, 2022
Data analytics firm Mu Sigma’s founder Dhiraj Rajaram gains full ownership of a firm that he founded nearly two decades ago, buys back shares held by the company’s investors Sequoia Capital and General Atlantic.
About $200-$300 million have been put together by General Atlantic and Sequoia in Mu Sigma and at least 2.5-3 times the investment will be made by them. For many years, they have been investors in the company and we’re looking at an exit. Usually, Private equity and venture capital funds have an investment horizon of 8-12 years in a firm. In 2013, Mu Sigma was last valued at $1.5 billion.
In 2011, both funds invested in Mu Sigma were among its largest shareholders, together holding nearly 38%. With a 52% stake, Rajaram became the largest shareholder in 2017 after the firm was exited by his former wife and shareholder Ambiga Subramanian.
With the rest held by employees and a few angels, he will now control 85% of the firm, with the current transaction. Apart from members of the management team who will invest and become shareholders, a significant portion of the remaining equity will be allocated to current and future employees, sources said.
The firm has 14 angel investors, who on an initial investment of $125,000, have together netted a return of over $100 million. Some of them include Prashanth Prakash and Subrata Mitra of Accel, Ashish Gupta of Helion, and American businessman Bill Campbell.
By a mix of cash and debt, the buyback will be funded. The last time around, to buy out Ambiga’s stake, apart from a portion of the company’s cash. This credit has been repaid in full, Rajaram got a $400 million credit line against his shares from Standard Chartered, Barclays, Deutsche Bank, and Credit Suisse, sources said.
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