Mu Sigma, which has most of its employees based in a centre in Bangalore, has raised $108 million in an investment round led by General Atlantic Llc in what may be the biggest private equity (PE) investment outside the West in an analytics services company.
The funding follows a $25 million round led by Sequoia Capital in April.
Chicago-based Mu Sigma’s founder and chief executive officer (CEO), Dhiraj Rajaram, said in a phone interview that $93 million came from General Atlantic and $15 million from Sequoia in the latest round of funding. Sequoia has thus raised its stake in the firm.
“We are profitable and generating cash, but we want to fuel growth,” Rajaram said. “We also wanted to strengthen our investor base. We wanted General Atlantic involved, give Sequoia a chance to raise its stake, and also allow some early investors a small exit.”
Mu Sigma provides data analytics and decision-support services for companies looking to use the increasing volumes of data available to them to make better business decisions. It claims to be the largest pure-play analytics services company in the world. Large multinationals such as International Business Machines Corp. (IBM), which has an analytics centre run out of India, Accenture Plc, and Indian vendors such as Infosys Ltd, Wipro Ltd and Cognizant are also increasingly focusing on this space.
Amneet Singh, vice-president of research firm Everest Group, said “big data” and analytics are a theme “that is resonating very well in the marketplace, as there is tremendous potential to drive business value.”
“And having a strategic investor on board brings in additional advantage in terms of client acquisition and the like.”
Mu Sigma uses applied mathematics and mathematical modelling for its analytics services. It was incorporated in 2005, and expects to make more than $100 million in revenue in calendar year 2012. It has about 1,500 employees, Rajaram said. It claims to have grown nearly 900% in the last three years, and has 50 Fortune 500 clients.
“We are excited to partner with the clear market leader in the rapidly emerging field of analytics and decision sciences for large global enterprises,” said Bill Ford, CEO of General Atlantic, who will be joining the Mu Sigma board.
Shailendra Singh, managing director of Sequoia Capital, said Mu Sigma has “world-class analytics capabilities, a unique operating model and an unconventional culture”.
Analytics services, which analyse the huge volumes of data that are thrown by businesses in their interactions with customers and suppliers and the market can be descriptive, prescriptive or predictive, Rajaram said.
“What happens in your business is known by descriptive analytics. That is the “what”. Then comes the “why”. Then the “so what”, the realm of prescriptive analytics. Then the “now what”, which is the realm of predictive analytics. Then there is the whole notion of decision-support services, which is about consumption of these analytics. We cover the entire gamut—from creation to consumption,” Rajaram said.