Indian Data Services Firm Mu Sigma Raises $108M From General Atlantic, Others

Chicago and Bangalore-based data analytics firm Mu Sigma has raised $108 million in an investment round led by General Atlantic. This is believed to be the biggest private equity investment made till date in the emerging market for analytics services, and follows Mu Sigma's April round of $25 million, led by Sequoia Capital.

Sequoia Capital also participated in this latest round, raising its stake in the privately held company. The earlier deal was done by the US and India growth funds of Sequoia, and led by its India managing director Shailendra Singh (who also sits on the company board).

Mu Sigma said in a statement that it's already profitable and can fund its own operations, but it will use the fresh funding to "accelerate its growth in the burgeoning analytics services market". Part of the new capital will be used to buy shares back from existing shareholders.

In 2008, Mu Sigma had raised a $30 million funding commitment from FTV Capital. Before that it also raised funding from Erasmic Venture Fund (now Accel India), though the status of this investment is not known.

The company was founded in 2004 by Dhiraj C Rajaram, who was earlier a strategy consultant at Booz Allen Hamilton and PricewaterhouseCoopers. Rajaram holds an MBA from the University of Chicago, an M.S. in Computer Engineering from Wayne State University, and a bachelor's degree in Electrical Engineering from College of Engineering Guindy, Anna University.

Mu Sigma, which has its main delivery centre in Bangalore, said between 2008-2010 it recorded revenue growth of 886 per cent. It now claims to be the largest pure-play provider of analytics and decision support services. The company "provides its clients with a competitive edge by helping them to institutionalize decision support and analytics within their organizations in a sustainable, recurring manner using a global delivery model," said a statement.

Mu Sigma works in areas like marketing, supply chain and risk analytics through the use of applied mathematics, business and technology. It has more than 50 Fortune 500 clients (including Microsoft and Dell) and 1500 analytics professionals.

Earlier this year, global consulting firm McKinsey issued a research report estimating that the universe of digital information will increase another 20-fold by the year 2020.Global consulting firm McKinsey recently issued a research report predicting that for businesses to handle an explosion of "Big Data" — defined as data sets too big to be readily handled by today's database technology — another 140,000-190,000 deep analytical talent positions need to be created in the coming years.

"We have long known and admired Mu Sigma for the strength of its management team and its innovative service offerings. The Big Data phenomenon is creating huge challenges for corporations as they look to better harness information to accelerate and improve decision making, and Mu Sigma is an excellent antidote," said Bill Ford, CEO of General Atlantic, who will be joining the Mu Sigma board. General Atlantic has invested in India-based IT/ITES firms like Genpact, Patni Computers, Hexaware, among others.