Dhiraj Rajaram takes over as CEO of analytics firm Mu Sigma

Our Bureau Bengaluru | Updated on January 16, 2018

In charge Dhiraj Rajaram, CEO, Mu Sigma, addressing a press conference in Bengaluru, on Tuesday   -  GRN Somashekar

Buys back shares from estranged wife; Sequoia, General Atlantic to stay invested

Mu Sigma founder Dhiraj Rajaram, who has been surrounded by controversy over the future of his company as well as because of his personal life, said on Tuesday that investors and his estranged wife are fully supportive of him taking over the reins of the company.

Rajaram said he has taken over as Chief Executive Officer of the analytics company and has also bought back shares held by his wife, Ambiga Subramanian.

After the share buyback, he will hold 51.6 per cent and Subramanian’s shareholding will be transferred to Rajaram. Subramanian will be a part of the Mu Sigma Board, but in a non-executive capacity.

Both Rajaram and Subramanian have signed a non-compete agreement.

The clarification comes after the couple divorced in May, which, in turn, became a source of worry for investors. In a prepared statement, Rajaram said that General Atlantic and Sequoia Capital will continue to be investors. However, Rajaram declined to put a number on the company’s valuation and also did not disclose the source of funding to buy back Subramanian’s shares in the company. “Financial terms between us will be mutually worked upon as a personal family matter,” said Rajaram.

Before the transaction, both the promoters held approximately 47 per cent in Mu Sigma. Subramanian was elevated as CEO and Rajaram as Chairman.

According to industry watchers, Rajaram, a product of the University of Chicago Booth School of Business, was instrumental in bagging deals from companies such as Amazon and Mercedes Benz, while Subramanian was in charge of operations.

Subramanian could not be reached immediately for comment. But in a statement, she said: “All rumours about me starting a competitive firm are untrue.”

In a statement, Mark Dzialga of General Atlantic said that there has been a lot of needless and inaccurate speculation around investors’ involvement in Mu Sigma. Shailendra Singh of Sequoia Capital added: “At this time of leadership transition, we remain supportive of the company.”

Key investors

Investment firms such as General Atlantic, Sequoia Capital, Fidelity Investments and Mastercard have invested about $200 million in the Chicago-based Mu Sigma, over the last eight years. Mu Sigma, being a privately-held company, does not make its revenue numbers public.

The company counts 150 Fortune 500 companies as its customers and Rajaram pointed out that 85 per cent of these customers come with repeat business. He said customers account for annual recurring revenues in the range of $1 million-25 million but did not give out revenue per employee or its revenue run rate.

Some investors have been concerned about the way the company has been reporting its numbers. In May, one former investor even dragged the company to court over alleged false revenue reporting.

In a complaint made in a Chicago court, Aon Corporation founder Patrick G Ryan claimed that Mu Sigma downplayed its own growth prospects, as a result of which he sold his stake in the company. Due to this, he claimed to have lost hundreds of millions of dollars, according to reports.

Published on October 04, 2016

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