Global Economy Taking A Turn For The Worse, Warns Zoho’s Sridhar Vembu

The global economy may be entering a difficult phase, with growth likely to slow down going ahead, according to SaaS unicorn Zoho’s cofounder and CEO Sridhar Vembu.

Vembu made the observation in a post on X (formerly Twitter) and cited the slowdown in Zoho’s growth, across countries and product offerings, in September as the reason behind his statement.

“We saw a fairly pronounced slow down in growth in September across countries and across products. Given the geographically and product-wise diversified nature of our revenue streams, I suspect the global economy is taking a turn for the worse. Caution ahead,” Vembu said in the post.

The statement comes at a time when the likes of the International Monetary Fund (IMF) and the World Bank have already warned of a slowdown in global growth due to high interest rates and other macroeconomic headwinds.

The IMF, in July, said the global growth is projected to decline to 3% in 2023 from an estimated 3.5% in 2022. Meanwhile, the World Bank predicted in June that the global growth will slow down to 2.1% in 2023 from 3.1% in 2022.

Amid all these, India’s gross domestic product (GDP) grew 7.8% in the June quarter of 2023-24. However, economists expect the growth rate to decline in the remaining quarters of the fiscal year.

Vembu’s statement holds importance as the SaaS firm has a global presence. Zoho surpassed 100 Mn users across its various business applications recently. The company now serves over 700K businesses across 150 countries.

Founded in 1996 by Vembu and Tony Thomas, Zoho has more than 12,000 employees globally. Despite a business slowdown, the bootstrapped unicorn posted a net profit of INR 2,749 Cr in FY22, registering a 43% jump from INR 1,917 Cr in FY21.

Some of Zoho’s customers include startups like BYJU’S, MakeMyTrip, BigBasket, Paper Boat, Zomato and brands like PUMA, Axis Finance, Samsonite, Tata Play Fiber, Star Health & Allied Insurance, Mercedes-Benz India, SpiceJet, IIFL Finance, Meril Life Sciences, Blue Star, Bosch.

Earlier in February, the Chennai-based company unveiled its unified communications platform, Trident, its first desktop native application that brings collaboration, productivity and communication experience in one place.

Zoho competes with the likes of Freshworks, Hubspot, Salesforce, Microsoft and many other Indian and international tech majors.

It must be noted that Nasdaq-listed Freshworks reportedly undertook a layoff exercise in the US in June, which impacted senior positions within the company’s product, engineering, and go-to-market (GTM) teams. The company fired employees in March 2023 and December 2022 as well.