I found this interesting explanation from here:
The nāgārjuna of vajrayāna is generally identified by the Tibetan Buddhists with the mādhyamika philospher, but these two were definitely different teachers. Matsyendranātha, a Tantric teacher of Shaktism, enjoying great reputation as a kaula yogin appeared in Assam sometime in the early centuries of the Christian era. He is taken as the founder of the Kaula system in kaliyuga. That system is said to have been started by four yuganāṭhas in four yugas and they are respectively khagendranātha, kūrmanātha, meṣanātha and matsyendranātha. arāha alias rāhulabhadra, a Buddhist monk of the vijnānavāda school, learnt Kaula Tantra from some efficient teacher belonging to the line of matsyendranātha. He adapted it to the fundamental principles of vijnānavāda and presented it efficiently as a secret sādhana taught by Buddhism. He eliminated cleverly two very important principles of śākta tantra for such purpose. One of these is the principle of the existence of a constant entity called ātman. The other principle is that of absolute theism. Besides, he changed the names of Tantric deities so as to make them look like Buddhist ones and gave all philosophical terms a Buddhist coloring. Thus he presented the śākta system of matsyendranātha as mystic Buddhism and gave it the name, vajrayāna. One of his very efficient disciples was a monk named nāgārjuna who also is, many a time, wrongly identified with the ancient mādhyamika philosopher of the South by the Lamas of Tibet and Mongolia. He popularized among Buddhist monks such Tantrism which passed on under the name of vajrayāna Buddhism. Padmasambhava, a disciple in his line, carried such Tantric Buddhism to Tibet and from there it spread to many countries of the Buddhist world.
How true is the above account?