'If you don't invest in R&D, you won't have long-term growth'

Sridhar Vembu, CEO and Co-founder of Zoho Corp., explains why the company will stay private and why he thinks valuations are not important

- Udayan Mukherjee

Sridhar Vembu, the CEO and Co-founder of SaaS player Zoho Corporation, made the unusual trek from Silicon Valley to a village in the Tenkasi district of Tamil Nadu much before working from home became a thing. That’s not the only thing that sets his digital company apart from its peers. Zoho, a globally successful player, has never raised mind-boggling sums of money—in fact it has never raised funding. Vembu, who is the ultimate bootstrapped billionaire, has no interest in valuations, he tells Business Today’s Global Business Editor Udayan Mukherjee in a freewheeling interview. The Zoho CEO explains why the company will stay private, why it is important to nurture talent and why it is difficult to define moonlighting. Edited excerpts:

Q: You’ve always stayed away from venture capital funding and private equity funding, much before the difficult times arrived. What made you stay away?

A: From the early days, I wanted to avoid venture capital [funding] because I wanted to build a company for the long haul, with a focus on our freedom to be ourselves. I felt that if we took venture capital [funds], we would have to provide an exit eventually. This could be an acquisition, which would mean we would lose our independence; or go public, in which case, we would, again, lose our independence. I felt that being private would give us the freedom to invest for the very long term. A lot of the things we do are focussed on the long term… which is very difficult to do when you have venture capital or public markets breathing down your neck— because quarter to quarter profitability becomes very important. That’s why we decided to stay private.