By Nucleus_ai

Copyright yourstory

Forget the flashy headlines and billion-dollar valuations. In the world of startups, India’s most profitable fintech giant, Zerodha, has built its success story on a completely different foundation.

When someone on Reddit asked co-founder Nikhil Kamath what Zerodha’s secret was, his answer was surprising. He didn’t talk about business models; he talked about patience and the amazing power of compounding.

So, let’s explore the story of a business that grew right alongside India’s financial rise, proving that a steady, long-term approach can win in the end!
The Long Game Of Compounding
Kamath emphasised that Zerodha’s success did not happen overnight. He spent nearly 25 years in the markets, a decade before founding Zerodha and 15 years building it. He described the company’s trajectory as one of compounding, where consistency, perseverance, and passion made all the difference.

Just as wealth grows steadily when invested wisely, businesses, too, can scale with patience and discipline.
As Kamath put it, “Things in business compound over time, especially if you like or love what you are doing and if you are lucky to be in the right place and time.”

This long-term view also meant that short-term setbacks didn’t derail the vision. For him, compounding is about building trust, credibility, and a brand philosophy that would endure over decades.
Starting Lean With Rs 10 Lakh
Unlike many of today’s heavily funded fintech startups, Zerodha began with an extremely lean setup. The initial costs were minimal and deliberate:
Website: Rs 2.5 lakh
Office interiors: Rs 5 lakh
Miscellaneous expenses: Rs 2.5 lakh

This added up to roughly Rs 10 lakh, the total amount invested in Zerodha’s foundation. More importantly, technology worked in their favour. The NSE Now trading platform was made available free of cost to brokers registered with NSE, thereby drastically reducing infrastructure expenses.

Back-office support, such as sending contract notes and maintaining ledgers, was outsourced at near-zero cost to a vendor eager to test their own system. Kamath’s background added context to this frugality.
Coming from a middle-class family, with a father who worked as a bank manager and a mother who taught Veena, he highlights that no wealthy relatives or big investors were funding the journey. This beginning, according to him, was as much about necessity as it was about discipline.
Right Place, Right Time
Every business story carries a dash of luck, and Kamath doesn’t shy away from admitting it. Zerodha’s rise, he says, coincided with India’s broader economic growth and increasing retail participation in the stock markets. Being present at the right place at the right time with the right product played a crucial role in the brokerage’s success.

He drew a parallel with Jensen Huang of Nvidia, who persevered for decades before striking gold with the AI boom. For years, Huang’s work may have seemed ahead of its time, but patience and persistence ultimately aligned with global trends.

Kamath suggests that Zerodha too benefited from this interplay of hard work and favourable timing. As he noted, “Any gyan any founder gives, eventually comes down to getting timing right, and this has got everything to do with luck.”
Customer Centric Over Investor Pressure
What truly sets Zerodha apart today is not just its cost structure or timing, but its philosophy. Unlike most startups that depend on venture funding, Zerodha has no external investors. This absence of investor pressure gives the company freedom to make decisions that prioritise the customer rather than quarterly earnings or exit strategies.

For instance, Kamath highlights the company’s no spam and no tracking policy initiatives that protect user trust, even if they come at a cost to the business. He notes that such principles are harder to uphold as a public company, where shareholder expectations often dominate decision-making.

For Zerodha, the ability to remain private has become its true moat, ensuring it remains aligned with long-term customer interests. In his words, “Now that there is no pressure to give any exit to any investor, we can continue doing what is right for the customer, sometimes even at the cost of the business.”
The Takeaway
Zerodha’s rise from a Rs 10 lakh seed investment to India’s most profitable brokerage highlights the importance of timing, frugality, and values-driven leadership. Unlike many fintech firms that chase massive funding and IPOs, Kamath’s approach emphasises sustainable success through trust and discipline. With no IPO plans and no external investors, Zerodha grows on its own terms, prioritising customers. This embodies the true lesson of resilience in its journey.