Business Model of Zerodha | How does Zerodha make Money

When it comes to the stock market and online broking, Zerodha is what comes to the mind of an Indian. Zerodha is the most prominent and the leading line discount brokerage company, founded in 2010. It was founded by the Kamath brothers- Nithin and Nikhil Kamath. The company is the first-ever stock brokerage company that gave rise to discount brokerage options for the investors as well as the traders.

‌‌Today, Zerodha is the biggest brokerage company in India with a client count above 5 million. And it is also known as the Robinhood of India.

‌‌The company contributes over 15% off to every retail order volume in India on a daily basis through trading and investing in various stocks, Commodities, F&O, IPOs, and others. In this article, we have briefly discussed the business model and revenue model of Zerodha. Let's get started!

About Zerodha
Where does Zerodha operate?
Key Products and Services of Zerodha
Target Audience of Zerodha
What is unique about the business model of Zerodha
How does Zerodha make money
FAQ

About Zerodha

‌‌The largest online brokerage firm in India, Zerodha is widely famous for its discount brokerage option. Zerodha offers financial services with the main motive of providing low costs to the customers. Zerodha is a significant member of BSE, MCX-SX, NSE that provides broking services to the traders of the stock market.

‌‌Zerodha is headquartered in Bengaluru and has a huge customer base. Zerodha is the first discount broker in India because of this, it gained huge support from the audience.

‌‌Besides, the most intriguing thing about Zerodha is that it always comes up with brilliantly innovative ideas supported by several strategic and definite efforts. Zerodha runs with the tagline of "The Free Trade Zone".

Moreover, Zerodha offers tons of open online education and community programs that uphold retail traders as well as investors.

Where does Zerodha operate?

‌‌Zerodha is a financial service company that offers various retail and institutional-based brokerage, bonds, mutual funds, and currencies & commodities trades. Zerodha operates in various states of India including Hyderabad, Bengaluru, and Pune. The company is headquartered in Bengaluru.

Key Products and Services of Zerodha

‌‌The broking limited company, Zerodha offers tons of key products to its customers. These products include Console for account management, Kite for trading platforms, Varsity for financial education, Quicko for the traders in Tax stems, Coin for Free Mutual Fund, Kite Connect API for the developers, Kill Switch for the risk management for retail traders, and Sentinel for the cloud-based market alert tool.

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Target Audience of Zerodha

‌‌Zerodha majorly targets its potential audience in Pune, Bengaluru, and Hyderabad based on the average age group of people below 30 years. It focuses on those below 30 people who are new to their jobs and already started saving from their salaries and are searching for better saving and investing methods to increase their money effectively. With its incredible services and products, it has gained over a million active users.

What is unique about the business model of Zerodha

‌‌The most significant thing about the business model of Zerodha is the success and popularity it gained among the audience. Zerodha offers a very convenient service to its customers, because of which it gained absolute success in the strenuous market as well.

‌‌The entire business model of Zerodha is very transparent and has no hidden cost later on. It lets you know all your transactions and also provides a quick tutorial on online trading.

It keeps all the information transparent and open to the customers. These facets help the company more vibrantly and gain more significant clients for trading.

How does Zerodha make money

‌‌Zerodha is the biggest trading network with the highest number of active users in India. People across India use Zerodha for investing and trading. The company charges only Rs. 20 (or 0.03%) for every F&O and intraday capital trade.

Although its charge is pretty low but as a huge number of transactions takes place, the company gains enough profit. Besides for the account maintenance, it charges Rs. 300, annually.

‌‌From the records of the past few years, Zerodha experienced rapid growth. This results in the 2% contributions of investors in the stock exchange. This, later on, boosts the revenue of the company. With this revenue source, Zerodha raised its valuation worth $1 billion. Today, the value of Zerodha is around $3.3 billion.

Conclusion

‌‌Even after this huge customer base, Zerodha is still working on expanding the company on a broad scale with a more significant client base. Nithin Kamath, the CEO of Zerodha mentioned in an interview that he is aiming to take the company to a client base of 5-10 million in the upcoming years.

Zerodha believes in promoting through its services, as the company hardly spends any money on advertising channels. The company holds a great reputation in the market because of its incredible services and customer interactions. This has resulted in comprehensive and impeccable growth of the company.

In the upcoming years, Zerodha is expected to grow even more and expand more promptly. Stay tuned for more updates!

FAQ

What is the revenue of Zerodha?

The revenue of Zerodha is US$150 million as of 2020.

Who is the founder of Zerodha?

Zerodha was founded by Nithin Kamath, Nikhil Kamath in 2010.

Is Zerodha a unicorn?

Yes, Zerodha became a unicorn with a self-assessed valuation of over $1 billion.