Zoho Reports Record Profit Of Rs. 2,836 Crore In FY23

Even as India’s startup ecosystem battles valuation markdowns and layoffs, one of its legacy profitable names continues to chug along as usual.

Zoho has reported a record profit of Rs. 2,836 crore in FY23. This is 3% higher than the profit of Rs. 2,749 crore that the company had reported in FY22. The number is also close to the highest-ever profit reported by an Indian internet firm, which was the Rs. 2,908 crore profit reported by Zerodha in FY23.

Zoho had a strong year, which saw its revenue cross the $1 billion mark, rising 30% from Rs. 6,710 in FY22 to Rs. 8,703 crore in FY23. Expenses rose 51% from Rs. 3,571 crore in FY22 to Rs. 5,392 crore in FY23. The highest rise in expenses was in advertising and promotional expenses, which rose 89% over FY22 to Rs. 1,354 crore. Employee benefit expenses meanwhile rose 49% to Rs. 2,721 crore.

Unlike most other Indian startups, Zoho makes the bulk of its money outside India. Zoho’s North America business drove the highest revenue for the firm with revenue of Rs. 3,988 crore, followed by Asia which includes SEA and India at Rs. 2,283 crore, and Europe at Rs. 1,952 crore.

Incredibly, all this international expansion has happened while founder Sridhar Vembu has moved to a remote village in Tamil Nadu. Zoho CEO Sridhar Vembu lives in Mathalamparai, a nondescript village near Tenkasi, where he walks in the fields every morning and evening, visits the local creeks and ponds, and rides an electric rickshaw. “Going for a walk in a village is a divine experience. After tasting this life in a village, it would be very hard for me to move to any major city anywhere now. That is the truth. I can almost say that I am addicted to this rural life,” he says. Zoho is also opening offices in smaller cities and rural areas, with a new office in Tirunelveli in southern Tamil Nadu about to come up.

And even more impressively, Zoho’s managed to to all this without ever raising external capital. “Ultimately it comes down to the question of “exit”,” founder Sridhar Vembu had explained his decision to never raise VC funding in a post in 2010. “As a founder, I have no interest in exit or liquidity. I am in business to run a business, not to run away from it,” he’d said. And his decision to never sell a stake in his company seems to have paid off — Vembu and his wife are together currently worth Rs. 40,000 crore ($5.3 billion). From never raising external capital, to running his company from a tiny village, and registering profits of Rs. 2,836 crore, Zoho seems to be turning conventional startup wisdom on its head.