Mu Sigma: Story of A Wandering Mind (The Third Unicorn of India)

 

By Sonali Munda

Hello and welcome to another chapter of my unicorn series. Today I will be discussing the third unicorn startup of India, “Mu Sigma”. According to my content’s structure I would be covering this unicorn's about and founders, founder’s stakes, current market valuation, investors and their investments up till now, competitors along with its history, and future. 

About:

“Mu Sigma”, from the name itself, suggests this company to be related to a data analytics service company. Mu Sigma is the world’s largest big data company. The firm has derived its name from the two statistical terms, “μ” and “σ” which symbolizes the mean and standard deviation respectively, of a probability distribution. It is a privately owned management consultancy industry, founded by Dhiraj Rajaram in 2004 who is also the CEO, and chairman of the company. Its headquarters are situated in Chicago, Illinois and currently, it has over 3,500 employees working. 

Dhiraj Rajaraam described his company and said, “We are helping them, use data and create a better art of problem solving”. “We are not in the business of solving specific problems, we are in the business of creating a better art of problem solving and we believe the world needs a different way of solving problems”. He, interestingly, simplifies the concept of data analytics by explaining it as a “language” and not as a science. He elaborates it to be “a context sensitive yet objective language through which various business units can collaborate with each other and help them make better decisions”. 

Investors and their Investments and Founder’s Share in the Company

Mu Sigma’s first $400000 as the initial funding was raised by the founder itself in two rounds. Then it was FTV Capital (formerly known as FTVentures) that technically was the second investor of the company but also the very first institutional investor, that funded Mu Sigma with $30 million in 2008. In April 2011, the company managed to raise an amount of $25 million from Sequoia Capital. In December 2011, the startup made a $108 million round of financing from Sequoia Capital and also from the ground equity investor General Atlantic who has invested in popular companies like Facebook. Then, in February 2013 MasterCard funded an amount of $45 million to the startup which crossed the company’s valuation to over 1 billion, helping Mu Sigma achieve the milestone of the “unicorn club”. 

Sequoia Capital and General Atlantic have been in the company as investors since then and even among the largest investors, but according to a report they were looking at an exit. May be the reason behind leaving the firm could be the prolonged investment horizon as private equity and venture capital funds have a usual investment time period of 8-12 years in a firm. 

The founder said that the sole and primary reason to opt for Sequoia Capital and General Atlantic for investments was to build a brand name of Mu Sigma in the market. 

But then, in 2017, Dhiraj himself became the largest shareholder holding 52% stake after the exit of his former wife Ambiga Subramanian who was also the major shareholder of the company. 

Sources said that Dhiraj Rajaram has no further plans to look for new investors as he assumes the company is profitable enough to sustain very well in the market and if in case the company runs out of capital, it would do an IPO in the U.S.

Current Market Valuation:

According to the reports of Forbes the company’s valuation stands to be $1.5 billion when the company was last valued on May 17, 2018. 

Competitors of the Company:

Just like any other company Mu Sigma also had a lot of competitors or alternatives you may say. Here, I have mentioned top 10 of them and those are the follows:

• Direct Online marketing

• Kai Analytics

• G2 Deals

• Dunn Solutions

• Deloitte Consulting

• WebMechanix

• Hero Digital

• ARPR

• ClearPivot

• Fathom and,

• Nielsen Marketing Mix Modeling

 

History of the Company:

The psychology behind building such a company was the necessity of problem solving. According to the founder’s words, he said that, as a student he was more into wandering stuff than into academics. He used to struggle as a student in his school days. He was not among the kids who would excel in the traditional education system. He claimed that his mind used to wander and go from one thought to another connecting various things but always got distracted and constantly asked for that distracted mind to get tested over and over again by the systematic exams. The traditional education system made Dhiraj lose a lot of confidence in him back when he was in school. According to him the syllabus-ridden education system did not allow him to wander and experiment. But later when life happened to him, he aced the test of life because he was free to do what he wanted to do. He further said that the beauty of life is that it does not test you on the basis of some given syllabus of the system, and the most exciting part is that it allows you to wander. All you need to have is the courage to do so and he did. That’s how he described the creation of Mu Sigma.  

Future of the Company:

In this era of industry 4.0, where business problems are always budding and nearly never ending, industries/business would need data analysts very badly and this is the reason why Mu Sigma is going to sustain. As, it has profound expertise and a good understanding of what they are doing, which makes it rank 1st in terms of customer service. Data analytics have become an inherent and integral part of every business activity and role, from a central role in the decision-making process of the companies these days. The rise of Mu Sigma must be the factor of the type of industry it is. It is something that every company would need in the present as well as in the near future because without excellent data study it is impossible for a company to sustain in the cut throat competition of the business market.