The Zerodha story: how Nithin Kamath bootstrapped a discount broker that took on the barriers

Zerodha began operating on 15 August 2010, with, in its own words, "the goal of breaking all barriers that traders and investors face in India in terms of cost, support, and technology". Wikipedia says it started with six employees and ₹2 crore of seed money from founder Nithin Kamath's savings and a friend. Today the company calls itself the biggest stockbroker in India, though sources differ on its exact rank.

Zerodha is often held up as an example of a company built without outside investors. Below is what the company's own page and Wikipedia say, where they differ, and what the story can teach founders who want to grow on their own money. This is a business story, not advice on trading or investing.

How it began

Zerodha's website says Nithin Kamath "bootstrapped and founded Zerodha in 2010 to overcome the hurdles he faced during his decade long stint as a trader". The name combines "zero" with "rodha", the Sanskrit word for barrier. Wikipedia says the company was founded by brothers Nithin and Nikhil Kamath as a discount brokerage, that it started with six employees and ₹2 crore of seed money from Nithin Kamath's personal savings and contributions from a Singapore-based friend, and that Kailash Nadh joined in 2013 to build its technology team.

What it did differently

Zerodha says it pioneered the discount broking model in India. According to Wikipedia, it charges a fixed commission of up to ₹20 on equity and derivative trades regardless of size, and it does not charge commission on equity delivery. Wikipedia also says that its technology is built in-house.

The company also runs open educational and community projects. Its page describes educational and community initiatives for retail traders, and Rainmatter, which Wikipedia says was founded in 2014 as an early-stage fund for start-ups, with investments including Cred, Smallcase and Sensibull.

Growth

• 2019: Wikipedia says Zerodha became India's largest retail stockbroker by active clients, overtaking ICICI Securities.
• 2020: It became a unicorn on a self-assigned valuation of around $1 billion, based on an employee stock option buyback, according to Wikipedia.
• Customers: Wikipedia says about 1.3 million in early 2020, rising to nearly 10 million by the end of 2022.
• 2023: It launched Zerodha Fund House.

Where the sources disagree

These figures describe different dates and different measures, so they are not necessarily in conflict. They show why a number needs a date and a definition.

What we could not confirm

• The ₹2 crore of seed money and six employees, which come from Wikipedia, not Zerodha's page.
• Current customer numbers, rank and profits. Zerodha's own page gives no figures with a date for these.
• Any detail of the company's finances, which we have not read in a filing.

Five lessons from the Zerodha story (our analysis)

1. Solve a problem you have lived. The founder was a trader first, and built what he wished existed.
2. Price simply. A fixed fee is easy to understand, which builds trust.
3. Build the core yourself. Writing its own technology gave it control.
4. Keep control if you can. The company's "bootstrapped" status is central to how it describes itself.
5. Be careful with numbers. Always say which date and which measure you mean.

If you want to grow without outside money

• Start by solving one clear problem for people like you.
• Keep your costs low and your pricing simple. Our break-even calculator shows the sales you need to cover your costs.
• Read our guide to franchise business in India if you are comparing building your own brand with joining an existing one.

Questions people ask

When did Zerodha start?

It began operations on 15 August 2010, according to its own website.

What does Zerodha mean?

A combination of "zero" and "rodha", the Sanskrit word for barrier, according to the company.

Is Zerodha bootstrapped?

Its website says Nithin Kamath bootstrapped and founded it, and Wikipedia says it was founded and bootstrapped by brothers Nithin and Nikhil Kamath.

Is Zerodha the biggest broker in India?

The company says so on its website. Wikipedia says it was the largest retail broker by active clients in 2019 and second-largest as of May 2024. Rankings depend on the date and the measure.

Know a story like this?

If you built a business with your own money, tell us your story.

This article is compiled from Zerodha's public website and Wikipedia and is not affiliated with or endorsed by Zerodha. It describes a company and is not investment, trading or financial advice. Figures may have changed. The lessons are our own analysis.