Meet the four startups that are making it big by bootstrapping

Zerodha, Kaleyra, SQUATS, and E&E Solutions, which work across a diverse range of segments, all have one thing in common – with small beginnings and internally-sourced funds, these startups have registered whopping numbers in just a few years of operations and look set to scale.

Shark Tank entrepreneur Mark Cuban, in an episode of the popular Ryan Seacrest radio show said the biggest mistake people make is, once having an idea and the goal of starting a business, to think they have to raise money. Cuban is not the only entrepreneur to try and bust this myth. Closer home, these four Indian startups are proving that external funding is not a necessity to make it big.

American billionaire Mark Cuban on the sets of award-winning reality TV show Shark Tank.

No external dependency at Zerodha

Nithin Kamath, Founder and CEO of Zerodha, takes pride in his company not having any external dependency. Speaking at YourStory’s flagship event, TechSparks 2019, earlier this month, Nithin revealed that the key to Zerodha’s success is not having any external dependency, whether for the IT system or funding.

Stating that he was averse to any external dependency, Nithin shared Zerodha had been bootstrapped from day one. He said that initially bootstrapping was not a choice as it was hard to raise external funding. However, later on, he found avoiding external funding meant, “we can do whatever our guts say is right for the business”.

He added that most of the startup's competition were raising millions of funds and pouring a large chunk of them into marketing and advertising, which was not needed at Zerodha. The entrepreneur said,

"We have no marketing costs because, for us, it's just not about creating an account. The company aims to help investors grow their investments."

Bengaluru-based Zerodha started operations in August 2010 with the goal of breaking all barriers faced by traders and investors in India in terms of cost, support, and technology. The company claims to have more than 1.5 million clients placing millions of orders every day through its investment platform, which comprises over 15 percent of all Indian retail trading volumes.

Early this year, Nithin had stated in a blog post that the company is the “largest retail brokerage firm in the world, not just India”, as it has taken a lead in the number of clients, compared to traditional giants like ICICI Securities, HDFC Securities, Kotak Securities, Motilal Oswal, and Sharekhan.

The National Stock Exchange (NSE) data indicated that, at that time, the eight-year-old trading startup served over 8.47 lakh clients, surpassing ICICI Securities’s client base number of 8.44 lakh. Other companies had recorded lesser numbers, including HDFC Securities at 6.74 lakh clients, Sharekhan at 5.4 lakh, and Kotal Securities at 4 lakh.

Kaleyra, from bootstrapping to a Rs 693-crore business

Kaleyra’s growth story is quite remarkable. What started as Solutions Infini, an application to send messages to parents about their children’s academic results, has now turned into a business with revenue of Rs 693.6 crore. Started in 2009 by Aniketh Jain and Ashish Agarwal, Kaleyra is now a global company that helps enterprise operators, worldwide, to power their business communication. Its client roster includes the likes of Amazon, Ola, Flipkart, AirAsia, Zomato,, and Practo

“When most of you order stuff, say a book or a cab, or shop and make payments or appointments, you get confirmation messages or a call. That is what we do. When a delivery boy calls or when you get messages and updates, that’s us,” said Aniketh, Co-founder and General Manager, Global Enterprise Business, Kaleyra.

Aniketh Jain, Managing Director, Cloud, Kaleyra

Speaking at TechSparks, Aniketh outlined ‘The Bootstrapping Journey’. Growing even in a crowded space, the company managed to see a leap in revenue from $1 million to $40 million. Along the way, they were rejected by nine VCs.

Aniketh said,

“But, that made us go back and focus on our business model. We said we could make it profitable by focusing on our margins, our customers, and growth and by getting the product right by meeting and not by figuring out the right customers. So, we were bootstrapped by choice.”

At SQUATS, bootstrapping equals innovating

Started in January 2016, health and wellness startup SQUATS is a bootstrapped company. SQUATS started as a free offering for health and fitness on a WhatsApp group around 2014 and then moved to a Facebook group.

Jitendra Chouksey, Founder, SQUATS

The company was registered in January 2016 and started offering coaching services for a small fee. The initial investment was just Rs 90,000, collected from six initial stakeholders, which was used to create the first website of SQUATS.

The Pune-based company’s founder, Jitendra Chouksey, said it is fun to run a bootstrapped startup, as he never knew what it was like to be a funded startup. Speaking to YourStory, the entrepreneur said,

“I remember when we started, it was just two, three of us. We'd stay awake for nights working on issues, listening to client feedback, 24x7 on the phone, it was crazy. Today, we have close to 300 people working with us, and yet we don't feel shy to get our hands dirty from time to time. It's a humbling experience.”

Jitendra pointed out that, when a company is funded, the tendency is to stop innovating, and the focus shifts from product and problem-solving to user acquisition. “We don't have that luxury. We grow with every customer and we understand that if we stop innovating, we're as good as dead,” he said.

He shared that the company was profitable to date, with good EBIDTA margins. Since inception, SQUATS has done business of over Rs 71 crore. From revenue of Rs 8 crore in FY16, the company crossed Rs 30.5 crore in FY19.

Jitendra added,

“Our current monthly run rate is roughly around Rs 3.5 crore and we are acquiring 3500+ customers every month. Our app, Fittr, which we launched in October 2018 has been downloaded by over 300,000 users and is getting downloaded almost 1000-1500 times a day.” 

Aligarh-based E&E Solutions: bootstrapping to Rs 20-crore revenue

E&E Solutions’ journey has been the story of Aligarh-based friends Mohammad Hamza and Sabir Ahmad Shamoo, who are not only running the startup successfully without external funding but are also trying to put the city on India's startup map.

The twenty-nine-year-olds started Engineering & Environmental Solutions (E&E Solutions) in their hometown in 2015. The firm develops environment-monitoring instruments using sensor-driven technologies for connected devices, with an automated approach to data collection and monitoring of solutions

The E&E team

E&E Solutions came into being after Hamza and Sabir had a random conversation at a tea stall about opting out of their 9-to-5 jobs and starting something on their own. Having always possessed an entrepreneurial drive and sharing a concern for the environment, the duo decided to rent a small one-room apartment in Aligarh and set up their own firm, with an initial seed capital of Rs 1 lakh raised from family and friends. 

Talking about their offerings, Hamza explains that the startup specialises in the design, manufacture, operation, and maintenance of air, hydrological, meteorological, and particulate monitoring systems. He added,

“Some of our key wins include remote control of devices and wireless transfer of continuous data through our IoT-enabled solutions and devices for real-time monitoring of environmental parameters.”

In a matter of just four years, the bootstrapped startup has bagged more than 30 clients, including companies like Whirlpool, Hero MotoCorp, The Leela, Taj Group, Mother Dairy, Dabur, Hindustan Steel, ITC Labs, the Centre for Ground Water Board in Lucknow, and the Centre for Science and Environment. In its first year of inception, the company recorded revenue of about Rs 36 lakh; in the following year, the earnings saw a five-fold growth and crossed the crore-mark.

The annual revenue crossed Rs 2 crore in FY18 and Rs 4 crore in FY19. In the current fiscal year, the startup is expecting to clock a Rs 20-crore turnover. With YoY growth of almost 300 percent, E&E Solutions is looking to maintain the rate over the next few years.

(Edited by Athirupa Geetha Manichandar)