BENGALURU: Big data startup Mu Sigma founder and chairman Dhiraj Rajaram has purchased the shares held by his former wife and chief executive officer Ambiga Subramanian to emerge as the controlling stakeholder in one of the Indian unicorns, new-age companies that are valued at $1 billion or more by private investors.
Rajaram, who will own 51.6%, is also taking up the mantle of CEO from Subramanian. She will remain a non-executive board member of the data analytics company based in Chicago and in Bengaluru. Subramanian decided to exit the company following following her divorce from Rajaram in May this year.
Rajaram, who held about 25.8% of the company on an undiluted basis, is buying Subramanian’s stake in the Chicago-based firm for an undisclosed amount. Both Subramanian and Rajaram held similar proportions before the stake sale while the remaining was held by private equity firms General Atlantic and Sequoia Capital and also MasterCard.
“It is good to finally put all distractions behind,” Rajaram said on Tuesday adding that the divorce had more impact on his personal side rather than on the business front. “I have a 13 year old son and sometimes it has been painful to explain him the stuff that has been published in the press. I had encouraged him to read newspapers so …that’s not been easy,” he added.
The decision of the founder couple puts to rest the concerns over future ownership and management of Mu Sigma, “the only profitable unicorn,” according to Rajaram.
Rajaram is said to have leveraged on the company’s cash and internal accruals to raise finances to pay his former wife. He declined to comment on the specifics of the transaction and how much Mu sigma was valued as part of the deal. Mu Sigma has about $200 million in cash and is generates about $50-60 million annually, giving Rajaram enough cushion to complete the transaction. General Atlantic and Sequoia Capital, other major investors, will keep their shareholding intact.
Subramanian’s future plans were not immediately clear considering there is a non-compete clause binding on all the employees. “Due to personal circumstances, it is time for me to move on from the management team of the company and do something different. All rumours about me starting a competitive firm are untrue,” she said in a statement.
“I would love her to be on the board as long as she wants. I have a lot of respect for her. She is one of the smartest people I have known in my life,” said Rajaram, a graduate from Chicago Booth School of Business. Mu Sigma has seen a spate of layoffs in recent quarters as leadership distractions led to slowing growth.
Founded in 2004 by Rajaram, who previously worked for consulting company Booz Allen Hamilton, the company raised about $178 million in three rounds from private equity firms since 2011. Subramanian, who joined as director in 2007, became the CEO in February this year. The company, which counts Microsoft and Wal-Mart among its customers, has about 4,000 employees in Bengaluru and Chicago.
“She will do something amazing. Is she starting up; I do not know that yet, and even she doesn’t know that fully,” Rajaram said when asked about his former wife’s future plan.