In 1980, 20-year-old Jay Chaudhry boarded an airplane for the first time in his life. He was flying from his native India to the U.S. to attend graduate school at the University of Cincinnati. It was a whole new world for him. He grew up in a small village in the Himalayas that didn’t have running water or electricity until he was a teenager. Now, at 63, he has a string of successful software startups under his belt and a net worth of $15.4 billion.
The founder and CEO of cloud security company Zscaler, Chaudhry is considered the richest Indian American and the 45th richest American period, according to Forbes. He got there by developing a special expertise in security software, and by not being afraid to strike out on his own and found new startups.
He was born Jagtar Singh Chaudhry, the youngest of three sons of Bhagat and Surjeet Chaudhry. His parents were small scale farmers without much money, and the family lived in the small village of Panoh, 230 miles north of New Delhi. To get to school each day, he had to walk 4 kilometers. Because there was no electricity, young Chaudhry often studied outside under a tree. Going out into the world to pursue higher education, Chaudhry received his BA in Electronic Engineering at Benaras Hindu University before earning an MBA and master’s degrees in computer engineering and industrial engineering at the University of Cincinnati.
He founded Zscaler in 2007, and it was the company’s success (and its 2018 IPO) that pushed his wealth into the stratosphere as the pandemic highlighted the need for secure systems. While his net worth grew rapidly over the last year, Zscaler was not Chaudhry's first successful software startup. It was his fifth.
Chaudhry and his wife, Jyoti, both left their jobs and used their savings to launch his first startup Secure IT in 1996. The company was the first pure-play security service for the internet. It was acquired by VeriSign in 1998, prompting Chaudhry to move to San Francisco to lead Verisign’s security services division.
Two years later, Chaudhry moved to Atlanta and founded wireless security company AirDefense, which was acquired by Motorola. Next he started CipherTrust, an email security gateway that merged with Secure Computing and eventually became part of McAfee. Then he launched CoreHarbor, an ecommerce platform that was acquired by AT&T.
Next came Zscaler, which Chaudhry has grown into the largest internet security company with revenues of $673.1 million in 2021. The company gives IT departments the ability to monitor all the traffic on a company’s network while also protecting it from threats of viruses and hacking. Zscaler is native to the cloud, and unlike its competitors, does not require clients to log into external apps or devices to monitor its network. It also differs from other IT security firms by not relying on IP-based routing and VPNs.
Chaudhry’s wealth has increased by leaps and bounds since Zscaler made its initial public offering on the NASDAQ exchange in March 2018 with a share price of $16. Zscaler is now trading at around $280. The company’s market cap is $28 billion, and it employs 2,800 people. Chaudhry and his family own 45% of the company. Zscaler thrived during the Covid-19 pandemic, causing Chaudhry’s wealth to balloon by 271%.
Zscaler operates on the idea of “zero trust,” which automatically assumes users are unauthorized and requires more information to gain access. It has two main products: Zscaler Internet Access, which addresses internet and Saas access, and Zscaler Private Access, which protects access to private applications that a business uses. Both go through what the company refers to as its “Zero Trust Exchange.”
The approach seems to be working. Zscaler’s customer base includes 35% of all Fortune 500 companies and more than 5,600 clients total. These clients include Siemens, AutoTrader, Schneider Electric, Bombadier, the City of Los Angeles, Coca-Cola, Cushman and Wakefield, the City of Boston, Fannie Mae, and Air France/KLM.
The company promises to stop data loss in two ways: by shrinking the attack surfaces and preventing lateral threat movement. Its security extends to work hosted in the cloud and on apps. And data loss is a major problem for companies. IBM Security’s annual report on the cost of data loss revealed that the average cost of data breaches rose by 10% from 2020 to 2021 and cost companies an average of $4.24 million. When remote work was involved, the cost of data loss rose by a bit more than $1 million. IBM revealed that it took an average of 287 days to identify a threat and the longer it took the more it cost the company.
It’s a problem companies are willing to pay to address. Zscaler currently boasts recurring annual revenues of $1 billion.
“My success so far has mainly been because I have very little attachment for money," Chaudhry said in 2019. "My obsession is really to make sure that the internet and cloud are a safe place for everyone to do business.”