Zoho built a global SaaS business from Tamil Nadu, can startups move beyond metro hubs?

Most Indian startups follow a familiar map. They cluster in Bengaluru, Mumbai or Gurugram through access to the capital, talent and networks that define the country’s startup ecosystem.

Zoho chose a different path.

Operating largely in Tamil Nadu, including towns like Tenkasi, the company has built a global software business without relying on venture capital, pursuing an IPO or tying itself to India’s biggest tech hubs. As funding tightens and startups face increasing pressure to turn a profit, Zoho’s model is gaining renewed attention.

Looking at how deeply embedded talent is in metro ecosystems, Bengaluru, Delhi-NCR and Mumbai account for the majority of startup hiring demand in India, according to TeamLease.

The question now is not whether Zoho’s approach will work. It’s whether others can copy it or not.

Outside of startup hubs by design

Rather than concentrating its workforce in urban centres, Zoho has invested in building teams in smaller towns closer to where much of India’s untapped talent is located.

At Tenkasi, engineers trained through Zoho Schools (in-house training program) work on products used globally. The startup forms a key part of the company’s talent strategy by recruiting students without formal engineering degrees, training them and integrating them into product teams.

However, this model differs from broader recruitment models. Most startups continue to rely on experienced talent pools concentrated in metros where access to talented professionals is greatest.

A different working model

Zoho’s differentiation goes beyond geography.

Unlike venture-backed startups, it has remained entirely bootstrapped, financing its growth through customer revenue. Today, the company serves more than 100 million users across more than 45 products and generates over $1 billion in annual revenue while remaining privately owned and profitable.

This approach has become more meaningful as financing conditions have changed. Venture funding for Indian startups has fallen by over 60% in 2023 compared to the peak in 2021, according to Tracxn.

Zoho built a significant portion of its workforce through in-house training rather than traditional hiring. The company recruits and trains students without formal engineering degrees and integrates them into product teams, according to its education arm, Zoho Schools. About 15% of Zoho’s workforce came this way.

Why is the model difficult to copy?

Despite Zoho’s scale, very few startups have fully adopted its approach.

Hiring patterns during the 2020-2022 funding boom reflect why. As capital flowed into the ecosystem, startups rapidly expanded their teams to fuel growth, according to data from platforms like Naukri.

This environment favored speed.

Venture-backed companies continue to operate under pressure to scale quickly and often hire experienced professionals from metropolitan ecosystems rather than investing in long-term training.

“Most startups optimize for speed because that is what the funding cycle rewards,” said Shweta Gosavi, CIEL HR. “Models like Zoho’s require long-term investment in people, and that’s harder to sustain.”

There are also practical limitations. Building teams outside of established hubs requires training infrastructure, internal processes, and management bandwidth that early-stage startups may not have.

An interesting model

Still, elements of Zoho’s approach are starting to gain traction.

As funding becomes more selective, startups are under pressure to manage costs and establish sustainable operations. Recruiting from small towns, where costs are often lower, has emerged as an area of ​​research.

“There is definitely more openness to hiring from outside the metro area now, especially after the pandemic,” said Samiksha Wankhede, a senior manager at a recruitment firm. “But most companies are still trying to figure out how to make this work at scale.”

Beyond geography

Zoho’s experience shows that change isn’t just about location.

Its model combines internal talent development, product ownership, and ongoing investment in elements of R&D that are more difficult to implement in fast-scaling, venture-backed environments.

The company has not only expanded beyond metropolitan cities; built systems to support distributed teams and long-term training.

For founders outside of traditional startup hubs, Zoho offers a working example of how to build global products without being tied to metro ecosystems. The model also highlights trade-offs, including longer timelines for talent development and scaling.

While most companies are concentrated in Bengaluru, Mumbai and Delhi-NCR, Zoho continues to operate largely outside India’s main startup hubs.

The model, created without external financing and supported by in-house talent development, has seen limited replication so far. Hiring models and financing structures continue to support metro-based ecosystems, according to data from TeamLease and Tracxn.

Zoho shows that it is possible to build globally from outside India’s metros, but the model remains difficult for most startups to replicate. The shift beyond the centers is occurring, but slowly.