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Zoho's founder built a SaaS hub in Chennai without VC money; here's how

Several of Chennai's SaaS start-ups trace their roots to Zoho, reports Tech in Asia

How Zoho built a SaaS hub in Chennai from scratch without VC money
Sumit Chakraberty I Tech in Asia
Last Updated : Nov 01 2016 | 2:43 PM IST
Zoho, whose software as a service (SaaS) suite serves 20 million users around the world, has a large banyan tree in its campus just outside Chennai. Sometimes outdoor meetings are held in its leafy shade, as sages would do in ancient India.

At one such recent meeting, an oft-repeated question came up: why doesn’t India produce a Facebook which got a billion users in just 10 years?

“Facebook is like one of the trunks of this banyan tree,” Sridhar Vembu, founder and CEO of Zoho, told the gathering. “The banyan tree has to exist for the trunks to grow.”

His banyan tree metaphor was for the broad foundation of Silicon Valley which had been built up over decades. 

Zoho was the first to spot the opportunity to make cloud-based software products out of Chennai for global customers, back in 2005. Since then, a number of SaaS start-ups have emerged in Chennai, several of which trace their roots back to Zoho.

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The best known of them is Freshdesk, a global leader in customer engagement software, whose founder Girish Mathrubootham rose to the position of vice-president in Zoho before striking out on his own in 2010. 


Zarget, which built a suite of tools to improve e-commerce conversion, raised $1.5 million in seed funding from leading VCs Accel Partners and Matrix Partners within two months of its founding. 

Vembu has misgivings about the VC-funded exit-focused start-up model. “VCs that aim for exits in five to eight or ten years don’t create durable companies… I realised that in India it wasn’t possible. The reason it works in Silicon Valley is the foundation of skills which enables a faster, optimal path. Without that foundation, it’s sub-optimal.”

This is an excerpt from Tech in Asia. You can read the full article here

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First Published: Nov 01 2016 | 2:30 PM IST

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