Zoho: How the Startup Scaled Sustainably with No Investors?

In the ever-changing and dynamic field of technology, many multinational corporations set the standard for developing web-based business tools and computer software. Leading organizations in an ever-changing sector, they are experts in creating novel approaches to solve present-day business problems, foresee requirements in the future, and identify chances for long-term expansion.

Their aim is centered on the transformative potential of software, which they see as an expression of intelligence and expertise that advances businesses.

A notable participant in the tech sector, Zoho Corporation, is one such example in this field. Zoho, which was founded in 1996 by Sridhar Vembu and Tony Thomas, has grown to become a major global player. Its headquarters are situated in Chennai, Tamil Nadu, India, while its corporate headquarters are located in Del Valle, Texas.

In this article, we will delve into the successful journey of Zoho, its startup story, history, business model, revenue model, funding, financials, growth, competitors, and more.

Zoho – Company Highlights

About Zoho
Zoho - Industry
Zoho - Founders and Team
Zoho - Startup Story
Zoho - Mission and Vision
Zoho - Name, Tagline, and Logo
Zoho - Products and Services
Zoho - Business Model
Zoho - Revenue Model
Zoho - Challenges Faced
Zoho - Funding and Investors
Zoho - Shareholding
Zoho - Investments
Zoho - Acquisitions
Zoho - Growth
Zoho - Financials
Zoho - Awards and Achievements
Zoho - Competitors
Zoho - Future Plans

About Zoho

Zoho Corporation, an Indian multinational technology company founded in 1996 by Sridhar Vembu and Tony Thomas, is a renowned provider of computer software and web-based business tools. With headquarters in Chennai, Tamil Nadu, India, and corporate headquarters in Del Valle, Texas, the company is well-known worldwide for its Zoho Office Suite. With its wide range of innovative productivity tools, Zoho is a leading force in the IT industry.

Zoho - Industry

According to the insightful analysis provided by Statista, By 2025, the revenue in this market segment is expected to reach US$740.89 billion. Additionally, the software market is projected to grow at a steady annual rate of 4.87% from 2025 to 2029.

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Zoho - Founders and Team

Zoho was founded by Sridhar Vembu (Co-Founder and CEO) and Tony Thomas in 1996. However, the company was not famous as Zoho but as AdventNet (1996-2009) back then.

Sridhar Vembu

Zoho Co-Founder and CEO Sridhar Vembu comes from a humble background. Sridhar was born as a farmer in a small village outside Thanjavur, but his dreams were big! He dreamt of studying in an IIT and then moving to the US, and he successfully seized his dreams.

Sridhar studied in a Tamil Medium Government School till the 10th standard and completed his graduation from IIT Madras in 1989. Sridhar eventually received a scholarship to pursue his Masters and Ph.D. in Electrical engineering from Princeton University in New Jersey. The founder of Zoho got his doctorate degree and opted for a professorship in Australia. He moved to Australia, but after 2 weeks, he came back, resigning from the job.

He started his career at Qualcomm in 1994. Two years later, in 1996, he kickstarted his own venture, AdventNet, with Tony Thomas, who is also an IIT Madras graduate and was an old friend of Sridhar. It was Tony, who wrote a rough draft of networking software and needed help to sell it when Sridhar joined him as the Chief Evangelist to form AdventNet, which later came to be known as Zoho in 2009.

Sridhar Vembu was awarded the Padma Shri, on the occasion of India's 72nd Republic Day (2021). Sridhar is the 59th richest man in India, according to Forbes 2020. However, the founder billionaire, is known for his modest attitude and often loves to go barefoot. Sridhar once said in an interview, "I live fairly simply, I hate wearing shoes. If I can avoid it, I do."

Tony Thomas

Zoho Co-Founder Tony Thomas worked at Bell Labs, before founding AdventNet. Sridhar and Tony both had similar interests in business and technology which led them to build their massive venture.

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Zoho - Startup Story

The amazing tale of Sridhar Vembu's startup starts with his modest upbringing in a Tamil Nadu middle class family. He worked for two years at Qualcomm in San Diego after earning his degree in electrical engineering from IIT Madras in 1989 and going on to pursue a Ph.D. in the United States.

Many were shocked when Sridhar decided to bravely return to India despite the comforts of his life in the US. Driven by a visionary mindset, he and his brother co-founded AdventNet, a software development company, in 1996. Later on in 2009, this endeavor developed into the well-known Zoho Corporation.

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Zoho - Mission and Vision

Zoho's mission is "empowering small businesses and startups, simplifying customer operations, and creating ever-lasting customer relationships."

Zoho's vision is to create superior software to solve all business problems. The company’s investment is more in developing its products and customer support than in focusing on sales and marketing.

Zoho - Name, Tagline, and Logo

The name ‘Zoho’ was the result of the abbreviation “Small Office/Home Office SOHO," says founder Sridhar Vembu.

Zoho - Products and Services

Zoho Corporation has been divided into the following divisions -

• Zoho.com - This division offers products related to Online business, and productivity and collaboration applications.
• ManageEngine - Offers Enterprise Management tools.
• Qntrl - Qntrl's streamlined workflow orchestration platform redefines operational efficiency by making it simple for organizations to create, automate, and analyze their business processes.
• Trainer Central - Enhancing training capabilities, TrainerCentral makes it easy to build and offer captivating online courses as well as conduct live workshops for learners who are located remotely.

Zoho offers over 55 products.

Zoho CRM - Released in 2005. Zoho CRM (customer relationship management software) is being used by over 250,000 businesses. Zoho CRM India helps businesses manage their sales, marketing, and customer service activities all from a single platform.

Zoho Writer - This is a cloud-based word processor. Zoho writer allows one to create documents and collaborate with the team members in real-time.

Zoho Sheet, Zoho Creator, Zoho Show, Zoho Meeting, and Zoho Docs are some other popular products by Zoho.

Zoho eventually propelled in almost every sector of sales, finance, communication, and marketing. The company brought in a greater digital transformation with more than 50 million users in 2019, and introduced ‘Zoho Remotely’, a toolkit to expedite work-from-home.

Zoho - Business Model

Zoho's unique business model emphasizes its dedication to high-quality products by focusing on "Marketing via Engineering." Using a "freemium" concept, customers can register for no cost and select premium upgrades as needed. Zoho prioritizes product quality, believing that powerful goods should be able to speak for themselves and only allocating low budget to marketing.

Zoho even boldly disrupted Salesforce's global user conference in 2013 by trolling them, which helped drive the company's annual growth to an astounding 35%. From its humble beginnings in a modest flat in Chennai, Zoho has grown into one of the top suppliers of web-based business solutions, providing a feature-rich cloud platform for smooth corporate operations.

Zoho - Revenue Model

Zoho makes revenue from different resources. Some of the most prominent ones are listed below:

Software Product Licensing: Zoho makes money by selling licenses for a wide variety of software packages that meet different company requirements.

Consulting Services: As part of its revenue model, Zoho provides clients with extra value by making sure their software investments are used to their full potential.

Software Maintenance: Zoho generates income by providing clients with continuous software maintenance services, which guarantee that their products receive frequent updates, patches, and additions.

Sales of Cloud Software Suite Licenses: Zoho's cloud software suite, which provides a vast array of tools and applications for enterprises, is a major source of income.

Software Subscription Price: As part of its business strategy, Zoho charges users a subscription price to access its software, which grants them access to additional features and services.

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Zoho - Challenges Faced

While many businesses had difficulties in the wake of the tech bubble crash in 2001, Zoho Corporation's experience stood out. Amidst the repercussions, Zoho, a company in the B2B space, faced a lack of customers. The creators used a novel strategy in response to these difficulties by emphasizing research and development, which resulted in the development of the ground-breaking product ManageEngine.

Simultaneously, efforts were focused on improving marketing and sales strategies. By overcoming these challenges, Zoho not only resolved its immediate business issues but also distinguished itself from other companies suffering from the recession and became a dominant force in the market.

Zoho - Funding and Investors

Zoho is one of those companies that is bootstrapped yet successful. Zoho has not raised any funding to date.

Zoho - Shareholding

Zoho's shareholding pattern as of March 2023, sourced from Tracxn:

Zoho - Investments

Zoho has invested in 9 companies to date.

Below are the details of the investments made by Zoho:

Exits

Zoho has exited from two companies: GenRobotic and Zenedge.

Zoho - Acquisitions

Zoho has acquired one company to date. ePoise is the maiden company that Zoho acquired on March 7, 2019.

Zoho - Growth

Zoho's noteworthy growth milestones are:

• It had served 150+ countries as of January 2024.
• It has 14 data centers as of January 2024.
• The company has 100 million+ users as of January 2024.
• It has 55+ products as of January 2024.
• The company has installed a 5 MW solar energy farm in India to supply electricity to the data centers and offices. They are able to reduce annual carbon dioxide emissions by almost 7,200 tons, which is the same as planting 14,400 trees as of January 2024.
• Zoho Founder Mr. Sridhar Vembu is revered as an inspiration among the entrepreneurs of the nation and has been conferred with a Padma Shri in 2021.

Zoho - Financials

Zoho has seen strong revenue and profit growth over the last few years. Revenue increased significantly, and profit margins improved despite rising expenses.

Revenue grew from INR 6,998.8 crore in FY22 to INR 9,158.9 crore in FY23. Profit also rose from INR 2,747.3 crore to INR 2,846.9 crore despite an increase in expenses.

Zoho Revenue Breakdown:

Revenue from operations grew by INR 1,992.8 crore, while other income saw a rise of INR 167.3 crore.

Zoho Profit/Loss Breakdown:

Net profit increased from INR 2,747.3 crore in FY22 to INR 2,846.9 crore in FY23, reflecting stable profitability.

Zoho Expenses Breakdown:

Expenses increased by INR 1,821.1 crore, primarily due to a rise in employee benefits and other expenses.

EBITDA

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Zoho - Awards and Achievements

Zoha has won several awards, some of the prominent ones are listed below:

• It won most SaaS Worthy Software in 2022.
• Zoho won Top Performer in the Data Quadrant(2021) and Emotional Footprint (2022).
• SoftwareWorld: The Best CRM Software Available Online (2022).
• 360 Quadrants: CRM Software Quadrant (2022), 360 Analysts' Choice Visionary Leader.
• It won the Leader in CRM Software Awards, Crozdesk (2021).
• Featured Clients: CRM Software Market Leader (2021).
• Top-Rated CRM Software: TrustRadius (2021).
• It won the Expert's Choice Award for Finances Online (2021).
• GetApp: Top Rated Apps for Sales Forecasting (2021).

Zoho - Competitors

Major competitors of Zoho include,

• Freshworks - Provides SaaS products for IT, customer service, sales, marketing, and HR.
• Salesforce - Salesforce's products include sales cloud, service cloud, marketing cloud, commerce cloud, and community cloud.
• Oracle - Oracle has developed many products to meet the need of various industries. Oracle's products include applications, databases, operating systems, and cloud services.
• Pipedrive - Offers a fully customizable, visual sales CRM that is suitable for every sales team big or small.
• HubSpot - HubSpot's products include marketing software, Sales CRM, customer service software, and content management software.
• QuickBase - Like Zoho, QuickBase also offers a wide range of services, including supply chain management, CRM and sales management, project management, and training management.

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Zoho - Future Plans

Zoho's co-founder and CEO, Sridhar Vembu, provided YourStory with an interview in September 2024, that revealed the company's ambitious future goals and highlighted its extensive R&D efforts. Zoho Corporation plans to set up data centers in every country across the globe by the end of this decade, according to CEO Sridhar Vembu. Vembu described Zoho's early involvement in a number of projects, including collaborations, investments, and self-initiated initiatives.

Zoho Corporation, an Indian software company, plans to grow by expanding data centers, AI, global reach, chipmaking, and sustainability efforts. It aims to set up data centers in almost every country by 2030, ensuring better service for customers. Zoho is also investing in AI to improve operations, warehouse management, and customer support. As part of its global expansion, the company plans to enter markets like the Middle East, Brazil, Japan, and Mexico, while also reaching rural areas in India and adapting products to local needs. Additionally, Zoho is venturing into chipmaking, focusing on specialized semiconductors and seeking government support for a fabrication plant. Committed to sustainability, Zoho is working on reducing its environmental impact and contributing to community development.

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FAQs

Is Zoho Indian Company?

Yes. Zoho is an Indian company headquartered in Chennai, Tamil Nadu, India.

Who is Sridhar Vembu?

Sridhar Vembu is the Founder of Zoho. He was awarded the Padma Shri, on the occasion of India's 72nd Republic Day (2021).

What is Zoho company?

Zoho is a SaaS company that offers online software, including e-mail, word processors, spreadsheets, wikis, and even customer relationship management. It is the Zoho mail company that functions diversely as a CRM and a suite.

Which companies use Zoho?

IIFL, SpiceJet, Deloitte, KPMG, and Amazon India are the top companies that use Zoho CRM.

Where is the Zoho Corporation headquarters?

The Zoho Corporation headquarters are listed in Chennai, Tamil Nadu, India.

What is the Zoho Corporation Chennai Address?

If you are wondering about the ZOHO Corporation Chennai address, then the research and development campus is located in Estancia IT Park, Chennai, whereas the product Zoho Desk was built and launched at the Zoho office at Tenkasi.

What is Zoho business model?

Zoho follows a bootstrapped SaaS business model. It offers a suite of cloud-based software for businesses, including CRM, collaboration, finance, and IT tools. Revenue comes from subscription fees, with a focus on affordability and no external funding. It targets small to large enterprises worldwide.

How does Zoho make money?

Zoho makes money through subscription fees for its cloud-based business software, including CRM, finance, and IT tools. It follows a freemium model, offering free basic plans and charging for premium features.

How Zoho started?

Zoho was started in 1996 by Sridhar Vembu and Tony Thomas as AdventNet, focusing on network management software. In 2009, it rebranded to Zoho and shifted to cloud-based business software. It grew without external funding, focusing on affordable SaaS solutions.

Why Zoho is so successful?

Zoho's success comes from its bootstrapped growth, maintaining full control without external funding. Its affordable SaaS model offers high-value business software at low costs, while a diverse product suite covers CRM, finance, and IT needs. A strong focus on in-house R&D drives innovation, and its global reach serves businesses of all sizes. Additionally, Zoho prioritizes an employee-centric culture, investing in talent and training. Its strategy of self-reliance, affordability, and innovation ensures sustained growth.

What is Zoho revenue?

Revenue of Zoho Corporation grew from INR 6,998.8 crore in FY22 to INR 9,158.9 crore in FY23. Profit also rose from INR 2,747.3 crore to INR 2,846.9 crore despite an increase in expenses.