Remaining Lean: Pure Technology Play

Besides providing an online broking platform, the Zerodha Universe is home to a number of other apps that make trading easier. These apps have been developed for specific needs:

Kite

It caters to the equity and commodities market using a meticulously designed website that serves a raging number of millennials with its ease-of-access and well-designed graphics.

Console

The console website offers customised reports on the basis of user’s investments and sector growth and variation.

Small Case

It is mainly concerned with mutual funds and portfolios that are designed by Zerodha experts to help millennial and fresh investors find their way in the stock market. The app provides ‘customised investment portfolios’ for the users which is one of its distinctive features.

Streak

Streak is a platform that is used for creating and testing out trading strategies.

Hence, it was a pure technology play. Zerodha avoided all kinds of frills and remained attuned to their goal of providing tech-backed trading platforms/apps.

However, they believed in creating a community and educating their users to keep the buzz going. Zerodha brought in a stock market education app known as ‘Varsity’ containing lessons on everything about trading. The main motive for this app was to target prospective millennial investors and help them learn trading on their own. This way, Zerodha was able to build a well-rounded offering which helped them bring in a large customer base. 

It managed to build credibility with such products, which is extremely important for any start-up. If you see, Zerodha avoided the whole model of relationship managers and sub brokers as well and avoided spending mullahs on advertising, hence maintaining a lean business model.

The stock market had never seen such a revolution where the technology removed the barriers of extreme high cost and poor support system in the broking industry. It created a buzz in the world of start-ups as not many dared to bootstrap their way to success at their early stages.

‘Zero’ dha Funding: Using Every Penny Wisely

Zerodha was set up with complete internal funding (Kamath brothers’ savings). It is commendable how the start-up entered the unicorn club without a single rupee sourced from outside.

The company adopted the slow and steady pace and took almost a decade to boom. They wanted to build a seamless, easy-to-use and transparent trading platform/app and roped in their chief technology officer Dr Kailash Nadh in 2013.

Every penny was used to innovate and develop products that could provide advantages to trade easily. The core strategy was ‘zero brokerage’ – no charges other than for intraday trading at Rs 20. The market grew, the users boomed and Zerodha was able to scale up efficiently.

Zerodha has focused on quality products and dynamic innovation since the beginning and continues doing the same. The company reinstated the fact that “one can grow within a pool of limited resources as well, if the technology is strong”.

The Game Changer: ‘Zero’ Brokerage USP

Zerodha brought in the era of discount broking, fixing rates of intra-day trading at a maximum fee of Rs 20. Equity of delivery was free, with no applicable charges on the same. The company was one of the first institutional brokers to keep such low prices on their services.

When a Demat account is opened with Zerodha, a customer is charged Rs 300 as annual maintenance charge (AMC), per year. The company brings massive revenues from such trades, 2/3rd of which are from the millennials aged between 18-35. These youngsters require a platform which is easy to use and has low brokerage charges. ICICI Securities has a minimum fee of Rs 35 for intra-day trading, while Zerodha caps it at Rs 20. This factor of competitive pricing led users to hop to the Zerodha platform.

This “discount strategy” was exceptionally well-thought of. Zerodha follows a low operational cost model and the entire company operates online due to which they were able to scale-up the business instantly. The strategy not only led to a continuous inflow of consumers all year round but also aided the word-of-mouth marketing. This is clearly reflected in the company’s revenue numbers.

It is important to mention here that the Zerodha model is not unique. It is similar to that of American financial company – Robinhood. However, Zerodha is credited for aptly implementing the same in the Indian territory.