Software as a service (SaaS) major Zoho Corp is incubating start-ups in different fields, including a medical technology firm, and is expected to come out with announcements regarding them soon.
According to sources, there are at least four such companies in which Zoho has made investments or shown interest in. This includes Zentron Labs, a company automating processes that require visual checking and vTitan, an international company with offices in California, Tamil Nadu, and Karnataka, engaged in the development, manufacture, distribution, and sales of a broad range of medical devices and consumables used in global healthcare markets.
Zentron labs uses industrial cameras in conjunction with computer vision algorithms to deliver innovative and custom machine-vision solutions that perform automated visual inspection. Coupled with data analytics, it ensures quality to its customers, it says. vTitan consults on and participates in the development of software related to hospital management (HMS) systems, patient/personal health record (PHR) systems, and electronic medical record (EMR) systems.
“I would not say those are part of Zoho Corp. Those are incubated companies in different fields and are started by different people. We found the like-minded people with similar approach and mindset and a full vision of developing a lot of companies and products from India. Like Zoho, as we say, we are in a long run,” said Raju Vegesna, chief evangelist, Zoho. He said that these companies are independent, perform on their own, and develop their products. Vegesna added that Zoho just offers whatever helping hand it can offer. He refused to comment on the equity holding of Zoho in these companies.
Zoho is not looking at these companies as subsidiaries. It is also not looking to acquire them fully at some point in time. The synergy could be Zoho learning some aspects of hardware from these companies and they could learn in terms of software from Zoho. However, these are independently viable companies that make products that can be independently valuable.
“This is not like an investment where you expect financial return such as selling it to a larger company. What we like about these companies that we looked at is that they have a similar vision. We don’t want to go public even 20 years from now, but stay private, do good products and keep adding good, happy customers. Just like Zoho, where we are not building a company to be acquired. It is a similar model. Unlike the VC model, this is different,” he added.
There could be some product announcement related to these incubated companies in the near future. Sridhar Vembu, founder and CEO of Zoho, earlier said that the company is looking at creating additional brands over time, similar to Zoho and ManageEngine.
Commenting on the company’s policy of not acquiring technology or companies for growth, he said, “We don’t see Zoho as a software company. We see it as a technology company. It is much broader and deeper than the software you see and use. Deep technology expertise is important.”
He pointed out the example of Apple, they make the hardware, operating system, the software and the applications in it, the graphic elements, the security check, etc. According to Vembu, Apple is not just a phone or application company. It is a technology company. “In a similar way, when you go down deep and it would take tens of years to yield the result. This is not gained from acquiring a company. It is not the technology we acquire, but also the people and culture. Integrating technology is probably the easiest part, but integrating the people and culture is the toughest,” he said.