Why Zoho Refuses to Go Public: Sridhar Vembu Prioritizes Innovation Over Quarterly Pressure

Zoho's Sridhar Vembu Reveals Why Company Won't Go Public: 'The Reality...'

Zoho co-founder Sridhar Vembu has disclosed his reasoning behind keeping the company privately held, despite increasing pressure amid India's 'Aatmanirbhar Bharat' campaign.

Characterizing Zoho as an 'industrial research laboratory,' Vembu emphasized that innovative products like their messaging app Arattai would likely never have materialized if the company had pursued an Initial Public Offering (IPO).

"We understand the push for Zoho to go public. But let me state the reality: Arattai would very likely not have been built by a public company that faces quarter-to-quarter financial pressure," Vembu stated in a post on X platform.

He described Arattai as a "hopelessly foolish" project that even faced internal skepticism. "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."

The Chennai-headquartered technology firm is currently investing in ambitious, long-range R&D initiatives across multiple domains including compilers, databases, operating systems, security, hardware, chip design, robotics, and artificial intelligence.

"In addition, we have invested in many R&D intensive companies that we know won't make money soon," Vembu explained, noting that Zoho prioritizes long-term innovation over immediate profitability—a philosophy he believes would be challenging to maintain under the scrutiny of public markets.

"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."

Vembu's candid explanation garnered significant attention online, with many social media users praising his clear vision regarding Zoho's future.

One supporter commented: "Even though it's an underdog and superficially a late entrant, Arattai will win. Zoho can be India's most important software company." Another observer noted: "When you open the doors for capital, eventually capitalism walks in."

A third commenter appreciated Vembu's transparency: "Sridhar, thank you for sharing this. It's rare and refreshing to hear a founder articulate why not to go public with such clarity."

Another user reflected on the broader Indian tech landscape: "Very true, I still feel our IT giants despite having hordes of cash are refrained from investing into anything worthwhile in R&D."

Recently, Arattai has experienced exponential growth as Indians seek alternatives to WhatsApp. According to Vembu, the app witnessed a 100-fold increase in traffic within just three days, with daily sign-ups surging from 3,000 to 350,000.