India Fintech Conclave | Nithin Kamath and Kailash Nadh on Zerodha’s principles, business model

The Zerodha founders chose not to spend money on advertising to acquire customers and instead focused on the quality of the trading platform and let word of mouth flow through. This ideology of not spending on anything without a clear vision of how to cover costs led Zerodha to profitability in its third year of operation.

At Moneycontrol’s first India Fintech Conclave (IFC) currently underway, Zerodha CEO Nithin Kamath and CTO Kailash Nadh discussed how Zerodha remains true to its name, with zero losses, zero funding, zero debt, and most importantly, a zero broker investment platform.

In conversation with Kamath and Nadh, Chandra Srikanth, Editor-Tech, Startups & New Economy, Moneycontrol, had an interesting anecdote – that zero is Zerodha’s favorite word, given the company’s debt-free, startup and profitable status.

When asked how the company could achieve this, Kamath recalled that there were no big ambitions when he started the business.

Founders Nithin and Nikhil Kamath chose not to spend money on advertising to acquire customers and rather focus on the quality of the trading platform and let word of mouth flow through. This ideology of not spending on anything without a clear vision of how to cover the costs brought Zerodha to profitability only in the third year of operation.

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Acknowledging Nadh’s contribution to the company as massive, Kamath said that in 2015, when Zerodha under the leadership of Nadh launched its internal trading platform and received overwhelming reception from users, it was the “Aha moment” when he realized that Zerodha is here to stay.

This was also the year Zerodha decided to eliminate brokerage fees from equity investments made through their platform, thus attracting even more accolades.

Speaking about the principles he leveraged while building Zerodha’s technology, Nadh said one of the first rules was to “keep things very simple and have the conviction to avoid FOMO.”

“I think a lot of organizations end up building way too many things, chasing short-term growth metrics. We’ve always had a simple and singular belief in building things that are meaningful to our customers, so we’ve never rushed to release new features arbitrarily,” said Nadh.

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Nadh said that he is quite happy with the fact that Zerodha really owns the technology stack.

Although SEBI continues to crack down on India’s fintech regularly, Nadh is not worried about it. “I know the approach is very conservative at Zerodha rooted in regulatory principles… It’s an integral part of the product development philosophy… It’s really become a cultural thing for us to think ahead of regulations,” he explained.

Throwing light on their IPO plans, Kamath said there is still time for it to happen. “If one day we hope that we have built enough products and the dependence on the capital market increases, we will think about an IPO,” he said.