For any startup in the tech space, venture capital money is a must to scale. With so much competition around, startups must invest heavily on R&D and marketing or face the possibility of going bust. All this at the time of the dot-com boom? Don’t even blink an eye – just take the money and invest! But this was not what the CEO of ZOHO Corp – Sridhar Vembu did.
ZOHO started as AdventNet back in 1996 in the US. In 1999, when they were making about $2 million in sales, they were approached by a VC for an offer of $10 million at a $140 million valuation – 70x sales, he humbly declined. According to him, “The philosophy of taking somebody’s money and promising them what they want looks like a gamble to me. So, like a good man, I said no to the money.”
“It was a good decision because today I can experiment with technology, and invest 50 percent of my money in R&D without having someone telling me where I should put my money,” he added.
In 2002, they bought the domain name Zoho for $5000 from a US-based hospitality startup which went into liquidation. They used the domain to launch a suite of office products for the parent company, AdventNet Technologies, and rebranded the company as Zoho Corp by 2010.
Zoho has earned the distinction of being the first software product unicorn. The Chennai and San Francisco-based software-as-a-service (SaaS) giant has been profitable for the last 13 years as it ended the financial year 2020 with a profit of $109 million – a 55% increase YoY. The company currently has over 45 Mn customers, over 7K employees and offices across seven countries. Zoho Corp has about twelve subsidiaries.
In 2004, the founders started Zoho University, now known as Zoho Schools, to onboard and train students with skillsets and abilities. Students are not charged a fee but are paid a stipend of Rs 10,000 throughout the tenure of the two-year course.
Vembu moved back to India in November 2019 and settled down in a village near Tenkasi. During the lockdowns, he started another initiative to educate the rural children. On September 13, Vembu, who is an active Twitter user, posted: “Within few days, my social distanced open air class swelled from three kids to 25 and kids got unruly and I was struggling (smiley) and realised how hard it is to be a teacher.” There, the education and mid-day meal is free of cost! He was awarded with Padma Shri at the 72nd Republic Day ceremony.
“As someone who truly believes that ‘village offices’ would be the ‘future of work,’ as village economies begin to prosper, We hope to stay humble and true to our roots, no matter what our age is.” he says.