Zoho’s Sridhar Vembu Explains Why IPO Isn’t Their Path

Zoho’s Reluctance to Go Public

In an era when many Indian startups and established technology firms eye stock market listings to fuel expansion, Zoho Corporation is charting its own course. Co-founder Sridhar Vembu has once again clarified why the Chennai-headquartered software giant will not pursue an Initial Public Offering (IPO). His explanation offers a candid view of the company’s philosophy, prioritizing independence, long-term research, and self-reliance over quarterly earnings expectations.

Speaking on social media platform X (formerly Twitter), Mr. Vembu explained that projects like Arattai, Zoho’s homegrown messaging app, would likely not have existed if the company had gone public. He emphasized that public companies often face relentless quarter-to-quarter financial scrutiny, leaving little room for experimentation or projects that may not deliver immediate commercial returns.


Building for Bharat, Not for Wall Street

“Arattai was a hopelessly foolish project in the eyes of many, including our own employees,” Mr. Vembu admitted. Yet the decision to move forward was rooted in his belief that India, or Bharat as he calls it, requires advanced engineering capabilities to drive innovation from within.

By resisting the pressure to list on Wall Street or Dalal Street, Zoho has preserved the freedom to invest in initiatives that may take years, or even decades, to mature. According to Mr. Vembu, Zoho is actively pursuing ambitious research in areas such as compilers, databases, operating systems, cybersecurity, robotics, chip design, and artificial intelligence. These projects, while capital-intensive, reflect the company’s vision of becoming not just a global software provider, but also a center for industrial research.


Long-Term Vision Over Short-Term Profits

Zoho’s strategy deviates sharply from the mainstream. Many technology companies, flush with investor capital after IPOs, often focus on rapid scaling and near-term profitability. Zoho, however, prioritizes sustainable growth and reinvests its revenues into R&D-heavy projects that may not generate returns in the immediate future.

“We have invested in many R&D intensive companies that we know won’t make money soon,” Mr. Vembu explained, noting that this approach would be nearly impossible to justify under the scrutiny of public shareholders. He underlined that Zoho is not concerned with maximizing short-term profits, as long as the business remains self-sustaining and financially stable.


A Culture of Frugality

Mr. Vembu also highlighted Zoho’s internal culture, which he described as modest and frugal. Comparing the company’s ethos to that of scientists and engineers at India’s space agency ISRO, he explained that senior executives and founders live simply, channeling resources into innovation rather than lavish lifestyles.

“To us, that is the essence of Bharat,” he wrote. He further compared Zoho’s philosophy to Japan’s disciplined and resource-efficient approach during its formative years of industrial growth.


Social Media Reactions: ‘Rare and Refreshing’

His comments quickly gained traction online, sparking widespread appreciation from entrepreneurs, industry professionals, and the public alike. One 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.”

Another social media user noted, “When you open the doors for capital, eventually capitalism walks in,” while others praised Mr. Vembu for his rare clarity in articulating why staying private is better aligned with Zoho’s mission. Several commentators also lamented that India’s larger IT firms, despite their financial strength, have not invested significantly in foundational R&D.


A Unique Stand in India’s Tech Landscape

Zoho’s stance places it among a small group of global tech companies that resist the lure of public markets in favor of independence. For Mr. Vembu, the decision not to go public is not just about business strategy—it reflects a broader commitment to self-reliant innovation, national capability building, and cultural values rooted in frugality and perseverance.

As India’s technology ecosystem continues to evolve under the banner of “Aatmanirbhar Bharat,” Zoho’s philosophy may well inspire other companies to rethink how they balance growth with long-term innovation.

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