Zoho CEO Sridhar Vembu Rules Out Immediate IPO, Focuses on Long-Term R&D

Speculation around a potential Zoho IPO has long circulated in business circles. However, co-founder and CEO Sridhar Vembu has reiterated that the software major is not in a hurry to go public, prioritizing long-term innovation over short-term financial pressures.

Zoho Focuses on R&D

In a recent post on X, Vembu explained that some of Zoho’s key initiatives, such as its messaging app Arattai, would likely never have been developed under the quarterly financial scrutiny faced by public companies. “Arattai would very likely not have been built by a public company that faces quarter-to-quarter financial pressure. It was a ‘hopelessly foolish’ project, and even our employees had expressed scepticism that Arattai would ever gain any traction,” he wrote.

Vembu emphasized that these projects stem from a commitment to strengthen India’s engineering capabilities. “We built it because we felt we need that kind of engineering capability in Bharat. We need a lot more of such capabilities in Bharat and we are on it,” he added.

Highlighting Zoho’s ambitious approach, Vembu noted that the company is currently pursuing long-range R&D projects in compilers, databases, operating systems, security, hardware, chip design, robotics, and artificial intelligence. Zoho has also invested in multiple R&D-heavy firms, where immediate profits are not expected.

“Zoho is a kind of an industrial research lab that also makes money to fund itself. We essentially ignore short-term profits, as long as we don’t lose money,” Vembu explained. He added that the company’s leadership follows a frugal lifestyle, akin to scientists and engineers at ISRO, to prioritize innovation and long-term growth over short-term gains.

Vembu framed this philosophy as the “essence of Bharat”, likening it to Japan’s developmental model. While speculation about a Zoho IPO is likely to continue, the CEO’s remarks make it clear that the company’s priority is to build engineering strength and fund ambitious R&D projects, rather than succumbing to the pressures of public markets.