Zerodha Made ₹4,700 Crore Profit In FY24 Without Raising VC Funding, Without A Ping-Pong Table, Without A Chief Happiness Officer, And Without Telling Anyone How To "Scale Their Mindset." The Startup Community Is Confused By This.

BENGALURU — Nithin Kamath is the most inconvenient startup founder in India. He is inconvenient because he did everything wrong by the playbook and everything right by the numbers, and this creates a problem for the startup ecosystem's narrative, which requires that the path to success runs through pitching to VCs, raising rounds with names (Seed, Pre-Series A, Series A, Series B, Series C, Series D, Series E, the late rounds where the name becomes a letter and then a number and then a description of desperation), burning capital aggressively, posting "lessons learned" on LinkedIn, appearing on podcasts, getting featured in Forbes, attending startup summits, giving speeches about "hustling" and "the journey," and eventually either IPO-ing or acqui-hiring or acqui-failing, all of which generates content.

Nithin did none of this. Nithin and his brother Nikhil Kamath started Zerodha in 2010 with their own money. They did not raise external funding. They did not have a PR firm for the first several years. They did not have a Chief Happiness Officer, a Head of Culture, or a foosball table. They had a discount brokerage model — flat fee per trade, no percentage of trade value — which was so straightforward that existing brokers dismissed it as unsustainable, because existing brokers made their money from percentage commissions and could not see why anyone would charge less. The existing brokers were wrong. Zerodha now has 7.5 million active traders. Zerodha made ₹4,700 crore in profit in FY24. Zerodha is entirely owned by its founders. No dilution. No VC pressure. No board telling Nithin to "10x the growth" in the next 12 months or return the fund.

The broader lesson of Zerodha — which India's startup ecosystem has heard and intellectually accepted and practically ignored — is that the fastest path to building a good business is to build a business that is good, which means solving a real problem for a real customer at a price the customer finds fair, which means generating revenue that exceeds costs, which is called profit, which is what businesses are for. This lesson competes, in the startup ecosystem, with a different lesson: that the fastest path to a high valuation is to grow fast, burn capital, achieve scale, and deal with profitability in Phase 3 (Phase 3 appears in multiple articles in this series; it has not yet arrived). The second lesson is more popular. It is taught at more bootcamps. It has produced more unicorns. It has also produced Byju's, BluSmart, and the full list of 2,000+ startups that shut down in the last 18 months.

Nithin Kamath suffered a mild stroke in early 2024, which he disclosed publicly with characteristic directness, attributing it partly to the stress of running a large financial institution and noting that the health of the founder is a risk that startups do not model adequately. He recovered. He continued working. He wrote about it publicly because he thought other founders should know. He has since become an advocate for founder mental health, which is a real crisis in India's startup ecosystem where the "hustle culture" expectation produces burnout at a rate that is documented and discussed and not addressed because the content that gets made is about the winners and the content about the losers is called "lessons learned" and does not include "the system is badly designed." Nithin said the system is badly designed. He said it after building one of India's most successful companies inside the system. This is the most credible version of that critique. The startup ecosystem has noted it. The ping-pong tables remain.