Zerodha founder and CEO Nithin Kamath Zerodha founder and CEO Nithin Kamath Zerodha founder and CEO Nithin Kamath Founded in August 2010, online trading firm Zerodha became the country's largest stockbroker in 2019 with nearly 8.5 lakh active clients. On Wednesday, its founder and CEO Nithin Kamath revealed key reasons behind the success of the firm. He said the company was able to grow because of all the referrals from its users. "A key reason behind the success of @zerodhaonline is that we were able to grow thanks to all the referrals from our users. Over 10 lakh customers have referred their friends and family, and today, we just made our largest referral payout to our customers," he said in a tweet.
Zerodha offers 10 per cent of the brokerage paid by anyone an account holder refers. However, the user needs to refer at least five people to withdraw the referral wallet earnings, according to the details available on the site. "The minimum payout under the brokerage sharing program has to be Rs 1000, and you should have at least five referrals for you to be able to withdraw your referral earnings."
In December last year, Kamath said that the company's customers, revenue, and profits had seen a 5X growth since March 2022 primarily due to the raging bull market in India. "As a business, we have been lucky to enjoy steady growth over the last decade...However, the last two years have brought us unprecedented financial success," he said in a blog post.
Kamath said that while Zerodha's products and philosophies on how it ran the business had been the key to its success, certain factors had helped its growth, and the industry in general, tremendously. "One is obviously the phenomenal bull market in India," he said. "Developments such as eKYC, online digital signatures, and UPI turned the largely offline industry into a truly online, paper-less one, enabling mass participation. And for us specifically, adoption via word-of-mouth from our customers."
The CEO then said that the company's higher gross margins were a result of several conscious decisions and approaches. He said Zerodha did not spend any money on marketing or advertising and it had a lean tech infrastructure built on top of high-quality free and open-source software. "We have grown our teams slowly and organically, regardless of industry trends," Kamath said.