Taking more VC money would affect investee firms' to bring out successful products, says Zoho founder
Chennai-based cloud services firm Zoho Corporation is planning to increase focus in domestic market at a time when various overseas markets are slowing down. The company, as part of its strategy, is expected to intensify its marketing and sales in India and expects to increase the contribution of domestic business to its revenue from the current less than 10% to around 25-30% over a period of 4-5 years, said a top official from the company.
The international market, including China and Europe are already going through a slowdown in economy and the situation is not that good in US also. Countries like Australia are also experiencing slowdown. While in short term the global economic issues would have an impact on the Indian economy, it is an attractive one in a long term.
"I am bullish about the Indian market on a long term. We expect India will grow in te next 10-15 years and we are focusing on the domestic market," said Sridhar Vembu, CEO of Zoho Corporation. "While the domestic market is currently contributing to around 10% of our revenue, we are expecting this to go up to 25-30% in the next four to five years," he added. However, he refused to reveal the revenue of the company.
It is also planning to set up a data centre in India, in the next few months, along with increasing its marketing exposure within the country. It would require around $3-4 million and would be completed in next three to four months.
This would include in the Rs 3,000 crore investment the company committed to the Government of Tamil Nadu during the state's Global Investors Meet 2015, in September, last year. The rest of the investment would be into expanding its facilities in Chennai and Tenkasi, in Tamil Nadu and strengthening the domestic marketing operations.
Last year, the company has recruited around 400-500 people and currently has around 3,000 employees. This year also it is expected to recruite almost the same number of people, he added.
The cloud service industry, which has been experiencing a growth in the past and has been fragmented, is expected to mature and see consolidation in the next two years. With consolidation more companies would start offering end-to-end services to customers, which would bring down the overall cost for the customer. The company claims it is already offering an end-to-end services and is well positioned with attractive price point and services.
During the period of consolidation, the company is also open to acquire small firms, with the size of 5-10 people and could bring in value to the company. The ticket size would be a few million dollar, he added.