'Let Me State The Reality…': Sridhar Vembu On Why Zoho Won’t Go Public
Sridhar Vembu said projects like Arattai wouldn’t exist if Zoho were under the short-term pressures of a public company.
Zoho co-founder Sridhar Vembu has pushed back against speculation over a potential initial public offering (IPO) for the Chennai-headquartered software giant.
Reacting to calls for Zoho to list on the stock market, Vembu said that some of the company’s key projects, including the messaging app Arattai, would likely never have been developed under the quarterly performance expectations of public companies.
“We understand the push for Zoho to go public. But let me state the reality,” he wrote on X.
He explained that Arattai was initially seen as a “hopelessly foolish” project, with some employees being sceptical about its chances of gaining attention. Despite this, Zoho went ahead with the project.
“We built it because we felt we need that kind of engineering capability in Bharat. We need a lot lot more of such capabilities in Bharat and we are on it,” he said.
Vembu also detailed Zoho’s approach to innovation, saying that the company is investing in ambitious, long-range R&D projects spanning compilers, databases, operating systems, security, hardware, chip design, robotics, and artificial intelligence. Zoho has also backed several R&D-intensive companies that may not yield profits in the near term, he said.
“Zoho is a kind of industrial research lab that also makes money to fund itself,” Vembu wrote. “We essentially ignore short-term profits, as long as we don't lose money. We have a culture of founders and senior executives living frugally, like how good scientists and engineers in ISRO would live. To us, that is the essence of Bharat. Japan operated that way when it was developing.”
The post soon went viral.
A user wrote, “Even though it’s an underdog and superficially a late entrant, Arattai will win. Zoho can be India’s most important software company. Make it happen.”
Vembu responded, “Thank you for your support... We still have a long long way to go.”
Someone asked if they could donate, to which Vembu said, “Thank you so much. As a profitable company, Zoho should not take donations. Instead please use and buy our products, that would help us fund more R&D. Very grateful for your support.”
When a company goes public through an IPO, it sells shares to the public and lists them on a stock exchange. This allows the company to raise large amounts of money, which can be used for growth, research, or new projects.
Arattai has seen rapid growth since its launch in January 2021. The app recently surged in popularity, topping the Social Networking category on the App Store and experiencing a 100x increase in daily sign-ups, jumping from 3,000 to 3.5 lakh users in only three days.
