How Zerodha was bootstrapped without outside funding, and gave investing away free

In December 2015, a Bengaluru broker stopped charging brokerage on equity delivery trades, according to its own blog.

No investor had to approve the move, because the company had never taken outside money. Inc42 reports that it made a profit of ₹4,283 crore in FY26.

That is how Zerodha was bootstrapped without outside funding. The Bengaluru broker started operations on 15 August 2010 under brothers Nithin and Nikhil Kamath, according to Zerodha's own about page. Getting there started with a debt.

A trader in debt, then a call-centre job

Kamath says on his personal site that he found trading by accident at 17. In the early 2000s he borrowed money and blew up his trading account. He then worked in a call centre to pay it off while trading on the side.

The length of that job varies by account. His site says four years. In a Z47 (formerly Matrix) interview he said three or four. Wikipedia dates it January 2001 to January 2004.

Kamath says he quit the job when the first person asked him to manage a portfolio, and his site thanks a man named Prakash as his first customer. He then became a Reliance Money franchisee to run a formal advisory business. Wikipedia adds that he worked as a sub-broker for Kamath Associates, a Reliance Money franchise, from January 2004 to January 2010.

How Zerodha was bootstrapped: the cheapest way into a broker licence

The opening budget is the murkiest part. Kamath has not given a figure in the pages reviewed. Wikipedia reports ₹2 crore of seed money and six employees, drawn from his savings and a Singapore-based friend. In a 2020 YourStory interview, Kamath recalled about 30 people in the first small office. Treat the starting capital and headcount as unconfirmed.

The cost-saving choices are better documented. A broker has to put deposits with the exchange, and Kamath explained the company structure this way:

“we started a business as a partnership firm because the deposit requirement was much lesser.”

Nithin Kamath, co-founder and CEO, Zerodha, via YourStory

He said the firm was converted to a public limited company only the year before that interview.

The NSE helped in another way. Kamath wrote on Substack that the brothers did not have the money to build their own trading platform, and that the exchange waived a membership fee of about ₹5 lakh when it realised they had little money. The licence itself, he told Z47, was paid for with money made when markets fell in 2008.

How did Zerodha grow without raising money?

It grew by keeping costs low, charging a flat fee capped at ₹20 a trade and relying on referrals instead of advertising, according to Kamath's accounts and later profiles. CapitalVia's biography says the company ran a referral programme from 2010 in place of ads, and, citing the Economic Times, reports about 42,000 clients in September 2014 and about ₹37 crore of revenue in 2013-14.

Technology followed. Nadh joined in 2013 to start the in-house tech team, according to Wikipedia. Zerodha's blog introduced the Kite web app, then in beta, on 25 September 2015. Nadh has said the first version of Kite was written in Python.

Then came the pricing decision. In its own blog post, Zerodha says it first waived brokerage on equity delivery in December 2015 and had until then charged the lower of 0.1% or ₹20. The stated aim was to drop the image of a broker for speculators. CapitalVia adds that intraday and futures-and-options trades stayed at the lower of ₹20 or 0.01%. BW Disrupt quotes Kamath saying the first 90,000 clients took five years, and that the company passed 330,000 in about two years after dropping brokerage on equity investments.

The company's 2025 estimate is that customers saved between ₹2,000 crore and ₹20,000 crore over nine years, depending on which fee they are compared with. That range is Zerodha's own calculation.

The numbers, and the recent dent

Zerodha reported FY22 profit of ₹2,094 crore on operating revenue of ₹4,964 crore, according to Business Standard, citing Entrackr. FY24 profit then reached ₹5,496 crore, YourStory reported in December 2024.

After that the numbers slipped. Inc42 reports FY25 operating revenue fell 11.5% to ₹8,847 crore from ₹9,993 crore, and FY26 profit rose 1.2% to ₹4,283 crore from ₹4,231 crore. Set against FY24 profit of ₹5,496 crore, that is a fall of about 23% in FY25.

Source: Inc42 (FY25, FY26) and YourStory (FY24)

Inc42 also reports FY26 brokerage income down 10.7% to ₹2,738 crore, and net transaction-charge income falling to zero from ₹400 crore. The company links this to exchange rebates ending and the end of the bull market. MediaNama reports that exchanges stopped giving brokers rebates from September 2024 after a SEBI directive.

₹2,738 CrBrokerage income, down 10.7%

₹2,269 CrInterest income, down about 4%

₹180 CrAMC charges, up slightly

₹0Net transaction charges (₹400 Cr in FY25)

Source: Inc42, FY26

Zerodha did not disclose FY26 revenue and said it was similar to FY25, adding, as quoted by Inc42:

“it hasn’t really grown in real terms.”

Zerodha company blog post, quoted by Inc42

Margin trading is filling part of the gap. The same post says transaction-fee losses are now being offset by margin-funding earnings. StartupSuperb reports the business began in December 2024, and Inc42 puts it at about 10% of revenue with a ₹9,000 crore book.

One caution on the data. Zerodha does not publish absolute figures and shows indicative bars, according to IANS, which put FY26 at about ₹8,500 crore revenue and ₹4,300 crore profit. An earlier version of Inc42's article gave ₹4,238 crore, which it has since corrected to ₹4,283 crore, though the old figure still shows in its web address. FY26 revenue is best read as roughly flat, not confirmed to the crore.

What a founder starting from nothing can copy

• Start from the trade you know. Kamath traded for years and worked as a sub-broker before launching Zerodha.
• Pick the cheapest legal structure that works. A partnership firm carried a lower exchange deposit requirement, by Kamath's account.
• Borrow free infrastructure while small. The NSE's NOW platform gave the brothers a trading front end.
• Replace the ad budget with referrals, and build your own software once cash allows.
• Keep one simple price and let it set you apart. The flat fee and later free delivery made the offer easy to explain.
• Watch dependence on one revenue line. Net transaction-charge income went from ₹400 crore to zero in a year.

Sources

• Zerodha's Bland FY26: Net Profit Up A Mere 1% (Inc42)
• Nithin Kamath (Wikipedia)
• About Zerodha (Zerodha)
• Zero brokerage and tech improvements got 330K clients in 2 years (BW Disrupt)
• Zerodha FY26 profit and margin trading (StartupSuperb)
• Zerodha's FY26 revenue, profit stay flat (IANS via The Hawk)
• Zerodha profit surges 86% to Rs 2,094 crore in FY22 (Business Standard)
• Zerodha crosses $1B in revenue in FY24; profit up 89% (YourStory)
• Matrix Moments: Nithin Kamath on how he bootstrapped Zerodha (YourStory)
• Building India's first discount broking model, Zerodha (Z47)
• Nithin Kamath's personal homepage