After being an active trader for close to a decade, there was one aspiration Nithin Kamath had before starting Zerodha: become the broker he never had. "So there was not just this one Eureka Moment, but the frustration that most of my earlier brokers had caused slowly culminating into starting Zerodha," the Founder and CEO says.
A one-of-its-kind brokerage firm, Zerodha has memberships on all the stock, commodity, and currency exchanges in India. The team is believed to be one of the first in India to disrupt the existing pricing structure by introducing a flat fee-per-trade model.
Starting the business on a shoestring budget, Zerodha had to work in a highly regulated and controlled environment. The real challenge, according to Nithin, was convincing clients that offering their services at low costs did not mean a compromise on quality. Zerodha claims to offer the best platforms at the lowest costs.
Nithin's younger brother Nikhil joined him when he was 17 years old. The duo had started an advisory business called Kamath Associates around 2006. Nithin says that Nikhil is an astute trader with over a decade of experience, and has a track record to brag of being profitable for 36 months in a row.
He specialises in designing trading systems to profit from market inconsistencies using various derivative strategies. He ensures that they don't compromise by taking excessive risk.
On Venu Madhav, COO of Zerodha, Nithin says,"Venu and I were flatmates; both our parents were working in Canara bank. Younger to me by almost seven years, he quit his job at HP to join me when I was just a sub-broker of Reliance Money, and struggling to pay monthly salaries on time," adds Nithin.
Hanan Delvi is the Chief of Client Relation. He joined Zerodha in 2009 to learn trading and simply decided to stay back. Seema Patil, Nithin's wife too is a part of the core team. "Kailash is a PhD in Artificial Intelligence and Computational Linguistics, and is the brain behind all our technology initiatives in our quest to put Zerodha on the global map," says Nithin.
Nithin explains their key initiatives:
Zerodha claims to be growing at 100 per cent YOY and has a consistent QOQ growth as well. Currently, it has more than 80,000 clients across the country contributing Rs 8,500 crore as average daily turnover in various exchanges. "For the FY 2014-15, our annual topline revenue was around Rs 70 crore and our target is to be a Rs 100-crore company this year in terms of revenue with similar margin percentage," adds Nithin.
Following a flat organisational structure, Zerodha claims to be the only brokerage company in India where no one has a brokerage target. This, according to Nithin, is to ensure that nothing is mis-sold to clients.
The bootstrapped team has also started an incubator called Rainmatter with a focus on fintech and an allocated corpus of over Rs 25 crore. It is working with startups to build the Indian capital markets.
"Some of the businesses that we are currently working with are Tradelab and Neotrade analytics, where we have invested Rs 2.5 crore and Rs 1.5 crore respectively. We also have three other fintech startups working on stealth mode," says Nithin.
He adds that the plan is to continue to innovate, disrupt, and grow the Indian capital markets. According to him, even though depositories claim there are close to 20 million demat accounts, the active may not be more than one to two million. "That is just 0.1 to 0.2 per cent of Indian population. We hope to play a part in taking this 0.2 per cent to say five per cent of Indian population," Nithin says.
India is a prime landscape for entrepreneurs using technology to promote financial inclusion. India presents a curious case study in this segment. In the country where 60 per cent of Indians are unbanked and 90 per cent of small businesses have no links to formal financial institutions, over 60 per cent of countrymen own mobile phones and over 60 per cent will own a smartphone by 2019. This growth around smartphones has ushered in a new era in the financial sector in the country.