Software products firm Zoho has invested nearly $10 million in five startups, including machine-vision company Zentron Labs and medical devices maker vTitan, to help the founders during the research and development phase.
Zoho, which builds products for enterprise data management and integration, will find complementing value in these investments, chief executive Sridhar Vembu told ET.
“We are investing in companies that think like Zoho,“ said Vembu.“We are not venture capitalists and exits are not what we are looking for through these investments.“
Experts said that Vembu, who does not believe in financialisation or chasing valuations, is not investing in these startups to build his portfolio.
“As the founder of one of the most successful software product companies out of India, he is thinking of what the future holds,“ said Sharad Sharma, cofounder of software product think tank iSPIRT. “These are bets he is making which will pay off in the next four-five years.“
One of the earliest multi-product companies in India, Zoho has followed a philosophy of building products rather than acquiring companies that build them. However, now as the enterprise software market gets more mature and saturated, Vembu said he believes that consolidation is the way forward for the market.
The company is scouting to acqui re small technology startups in artificial intelligence and data analytics, among other businesses. However, Vembu said, his company is not in a hurry and will only go ahead with the acquisition once the right fit comes along.
“We talk to a lot of entrepreneurs but what makes the cut for Zoho is the acquisition needs to be tucked in to integrate into our product portfolio and we find a cultural fit in the entrepreneur,“ said Vembu. “Entrepreneurs who solely build a product startup with an intention of exit will not fit in Zoho culture.“
One specific sector Vembu is targeting is healthcare by trying to work on technologies that could be used in medical devices. “We see ourselves as a technology company . Today medical equipments are softwareenabled, they take a lot of data inputs, and that is where we want to play a role in the integration of product and software,“ said Vembu.
Source: ET
Zoho invests $10 million in five startups
