Nithin Kamath on Building Zerodha Without VC — Our Full Notes

In a startup ecosystem obsessed with funding rounds, valuation milestones, and term sheets, Zerodha is the most inconvenient success story.

No venture capital. No institutional funding. No growth hacks. No war chest for customer acquisition. Just a product, a clear belief about how a business should be built, and a decade of disciplined execution.

Zerodha is today India's largest retail stockbroker by active clients. It is profitable — genuinely, substantially profitable — in a sector where most competitors are burning cash to acquire users they cannot monetise. Nithin Kamath, its co-founder and CEO, built it this way deliberately.

This is not luck. It is a philosophy. And in his most revealing interviews, Kamath has explained exactly why he made the decisions he did, what those decisions cost him, and what he thinks about the path he chose now that he is on the other side of it.

These are our notes. Organised around the three questions we think matter most for any founder listening to him.

Before the Notes — Why This Interview Matters

Most founder interviews are optimised for inspiration. The founder tells the origin story, explains the pivots, credits the team, and ends with advice that sounds meaningful but is too general to act on.

Kamath's interviews are different because he is unusually specific and unusually honest about the uncomfortable parts. He does not pretend the journey was clean. He does not pretend the no-VC decision was obvious or easy. He talks about what it actually cost and what he actually thinks about building a business in India.

That specificity is why we chose this as our interview of the month. Not because Zerodha is famous — because what Kamath says is genuinely useful for founders making real decisions right now.

Watch the full interview on YouTube. It is 42 minutes and worth every minute. These notes are a companion to the interview, not a replacement for it.

Note 1 — Why Kamath Never Wanted Institutional Money and What That Decision Cost Him Early On

The decision not to raise institutional funding was not made from a position of strength. Kamath has been clear about this. In the early years of Zerodha, the business was not obviously going to work. The discount broking model was new in India. HDFC Securities and ICICI Direct dominated retail broking. Convincing traders to move to a platform they had never heard of, built by people they had never heard of, was genuinely difficult.

In that context, not raising money was not a triumph of conviction — it was a constraint that became a philosophy.

Kamath has said that in the early years they could not raise money even if they wanted to. Nobody was interested in a discount broking startup in 2010. The VCs they spoke to did not understand the model. The ones who understood the model did not believe the unit economics could work at scale in India.

So they bootstrapped. They grew slowly. They kept costs at zero where possible. Kamath and his brother Nikhil ran the business on the capital generated by the business itself.

What this cost them:

Growth. The early years of Zerodha were genuinely slow. Competitors with institutional backing were spending on marketing, on brand building, on geographic expansion. Zerodha was growing by word of mouth among traders who liked the product and told other traders.

In hindsight Kamath frames this as a blessing. The word-of-mouth growth meant every customer who came in was a customer who actually wanted to be there — not a customer acquired through a discount or a promotion who would leave when the discount ended. The retention was exceptional. The quality of the customer base was exceptional.

But in the years when it was happening, it did not feel like a blessing. It felt like being left behind while competitors scaled.

The philosophy that emerged:

The experience of building slowly on earned revenue shaped how Kamath thinks about business fundamentally. He became allergic to growth that costs more than it generates. He became suspicious of metrics that look impressive but do not connect to actual business health. He built a company where every decision had to pass one test — does this make us more sustainable or less?

That philosophy, formed under constraint in the early years, is what makes Zerodha what it is today.

What Indian founders can take from this:

The no-VC path is not right for every business. Kamath himself has said that clearly. But the underlying principle — that you should understand exactly what you are trading when you take institutional money, and be honest about whether that trade is worth it for your specific situation — is universally applicable.

Most founders take money because it is available and because everyone around them is taking money. Kamath's story is a reminder that the question worth asking first is not "how much can we raise" but "what does this business actually need to reach sustainability and what is the fastest path to that point."

Note 2 — The One Metric Zerodha Obsessed Over When Every Other Fintech Was Chasing Users

This is the most practically useful thing Kamath has said in any interview and it is also the thing most founders hear and then immediately forget because it cuts against everything the startup ecosystem celebrates.

While every other fintech platform in India was reporting monthly active users, app downloads, registered users, and gross transaction volume — Zerodha obsessed over one metric.

Revenue per active user.

Not total users. Not user growth. Not market share. How much real revenue does each genuinely active user generate for the business and how does that number change over time.

Kamath's reasoning is simple and devastating in its implications. A fintech platform can have ten million registered users and be worthless if the revenue per active user is a rupee a month. The users are real. The activity is real. The revenue is not. And the cost to acquire and retain those users is very much real.

Zerodha made a deliberate choice to be smaller and more profitable rather than larger and less profitable. When this decision was made, the startup ecosystem treated it as evidence that Zerodha was not ambitious enough — too conservative, too risk-averse, too old-fashioned in its thinking.

The market cap of Zerodha today, compared to better-funded competitors who chased user numbers, is the response to that criticism.

Why this matters for 2025:

The era of growth-at-all-costs is genuinely over. The funding environment of 2021, which rewarded user growth above all else, collapsed in 2022 and has not fully recovered. Investors who previously celebrated user numbers are now asking about unit economics, contribution margin, and path to profitability.

Zerodha never had to make the painful transition from a growth story to a profitability story because it never told the growth story in the first place. The founders who are in the most trouble right now are the ones who built their entire business narrative and their entire team culture around growth metrics that do not connect to sustainable business health.

The practical question for your business:

What is the one metric that, if it moved in the right direction consistently, would tell you the business is genuinely healthy — not just growing? That metric is worth more of your attention than any other number you track.

For Zerodha it was revenue per active user. For your business it will be something specific to your model. Finding it and making it the centre of your operational focus is one of the highest-leverage decisions you can make.

Note 3 — What Kamath Would Do Differently If Starting Today

This is the question every interviewer asks and most founders answer with something safe and slightly inspirational. Kamath's answer is neither safe nor inspirational. It is specific and worth paying close attention to.

He has said in multiple conversations that if he were starting Zerodha today he would think much more carefully about technology from the very beginning.

Zerodha was built on technology that was functional but not architecturally elegant. The pace of growth in the early years did not require world-class engineering. As the business scaled to millions of users and billions of transactions, the limitations of early technical decisions became expensive to fix.

This is a pattern that almost every founder who has scaled a business recognises. The technical decisions made when you have twenty users become the technical debt that slows you down when you have two million users. Fixing it is expensive, disruptive, and always happens at the worst possible time — when the business is growing fast and every engineer is needed for new features.

The second thing Kamath has said he would do differently:

Build the team earlier and more intentionally. Zerodha for many years ran lean — leanness was a virtue, a reflection of the capital discipline that defined the business. But there were moments where the right hire, made six months earlier, would have compounded significantly. He has talked about waiting too long to bring in people who complemented his own gaps.

This is a common founder failure. Founders who are strong operators tend to underinvest in people who think differently from them. The business grows in the direction of the founder's strengths and develops blind spots in the areas the founder finds less interesting. The antidote is deliberate, early hiring in the areas where the founder is weakest — which requires the founder to know what those areas are and to be honest about them.

The third thing — and perhaps the most surprising:

Kamath has said he wishes he had been more public and more communicative earlier in Zerodha's journey. Not for marketing purposes but because the conversations that come from being visible — with other founders, with potential partners, with people thinking about similar problems — compound in ways that are hard to predict.

Zerodha's early culture of keeping its head down and focusing on product was right for the product. But it meant that Kamath spent years solving problems in isolation that other founders had already solved and would have shared freely if asked.

What this means for founders today:

Build in public, or at least semi-publicly, earlier than feels comfortable. The conversations you have when you are visible — even imperfectly visible — generate compounding returns that the comfort of staying quiet does not.

The Pattern Across All Three Notes

If you read these three notes together, a single pattern emerges across all of them.

Kamath built Zerodha by being unusually clear about what the business actually was and what it actually needed — and refusing to let the noise of the startup ecosystem change that clarity.

The no-VC decision was clarity about what kind of business he wanted to build and what trade-offs were acceptable. The revenue-per-user metric was clarity about what business health actually meant. The things he would do differently are all about places where that clarity slipped or arrived too late.

That clarity — about the fundamental nature of your business, about what metrics actually reflect its health, about what trade-offs you are willing and unwilling to make — is rarer than any specific tactical advice Kamath gives.

It is also more valuable.

Watch the Full Interview

The notes above cover three specific themes. The full interview covers considerably more — his views on regulation, on the future of retail investing in India, on his health challenges and how they have changed how he thinks about leadership, and on what he thinks Zerodha's next chapter looks like.

Watch it on YouTube. Search "Nithin Kamath" and filter for long-form conversations from 2023 and 2024 — the more recent interviews are the most candid. It is 42 minutes of the most honest thinking about building a business in India that we have found in any format.

Our Read

What Kamath represents in Indian business is genuinely rare. A founder who built something of enormous value, on his own terms, without compromising the fundamental character of the business to satisfy investors or market expectations.

That does not mean every founder should build the way he built. It means every founder should be as clear as he was about what they are building and why.

That clarity, more than any specific tactic or tool, is what the Zerodha story is actually about.

Published by Money Minded Men's · March 2025 · Interview of the Month

Tags: Interview of the Month, Nithin Kamath, Zerodha, Bootstrapping, Fintech India, Founder Stories, Building Without VC, Indian Startups

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