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How does Zerodha Make Revenue? | Zerodha Startup Story | Revenue Model



How does zerodha make money

Zerodha is a well-known discount broker in India. They provide zero brokerage long term/delivery trades and a fixed brokerage for industry trades. Here we will discuss How does Zerodha Make Money? along with its revenue model.

Zerodha makes revenue through brokerage charges, especially from Futures and Options trading. Most of the high volume trades use Zerodha for its trade execution speed which increases the number of transactions per second, and also increases earnings from the brokerage.

What is Zerodha?

Zerodha Broking Limited is an Indian financial services company that offers brokerage, currencies, mutual funds, commodities trading, and bonds. It started operations in 2010 by Nithin Kamath and Nikhil Kamatm with an aim of breaking all barriers that traders and investors face in India in terms of support, cost, and technology.


It has become the biggest stockbroker company in India with retail clients. Over 8+ million clients place millions of orders daily through a powerful ecosystem of investment platforms, contributing over 15% of retail trading volumes. They have also run various popular open online education and community initiatives to empower retail traders and investors.

How does Zerodha Make Money?

Onboarding trades who engage in high volume intraday trading offers money for Zerodha. In the financial year 2020, the Zerodha trading platform has generated 950 crores using this simple technique. Zerodha’s business model allows them to earn a lot of money with the least amount of capital outlay. Zerodha makes pennies. But day trading is highly profitable for most brokers. Here are the details of how much they charge their 4+ million customers. You check the different ways on How does Zerodha Make Money in 2022.

Charges a flat fee on intraday and F&O trades

Zerodha minimises its brokerage compared to other full-service brokers who charge a percentage of trade value and it limits brokerage. Irrespective of the transaction, Zerodha charges a maximum brokerage of ₹20 per transaction.

High volume of transactions

The volume of transactions on Zerodha is crucial to their business strategy. Instead of charging more amount per transaction, they focus on building a great product so more clients are attracted to trade on it. So, the brokerage company earns Rs.20 on millions of transactions that occur daily. Multiply the amount by 10 to know the power of the Zerodha business model.

Also, Refer: How does Cred Make Money?

Startup incubation

Rainmatter is Zerodha’s incubator that has launched several successful finance firms. The list of all the successful startups that Rainmatter has invested in.

  • Small case: India’s first thematic investment platform.
  • Streak: It is the first end-to-end platform in the world for creating, deploying, and backtesting trading algorithms without the need for coding.
  • Tradelab: Builds cutting edge technology to drive capital market businesses.
  • CRED: Members only app that pays you for paying credit card bills with additional benefits.
  • LearnApp: It is the first-hand lessons from industry leaders in trading, investing, technology. and management.

And there are other ways also. Check the complete list of investments on Zerodha’s website.

True Beacon and Mutual Fund AMC

Zerodha’s first alternative investment fund is True Beacon. The fund was built to tackle the volatility of the markets for high net worth individuals with a minimum investment of $2 million. True Beacon earned 13%+ returns in the first year.

Because of the success with True Beacon, Zerodha has also applied for a mutual fund AMC license and aims to launch its own diversified fun portfolio in the future. The fee collected by True Beacon also become a significant part of Zerodha’s revenue sources.

Do Check: Top ways to make money online with Google

No Marketing Strategy for Higher Profitability at Zerodha

One of the most powerful strategies that Ninthin Kamath applied was the “No-marketing” strategy. He wanted to create a product so good that people do marketing. As planned, Zerodha launched the world’s cheapest brokerage on a broad scale. It rocked full-service brokers by providing even greater service for less investment.

Also, Find: Skills to Learn Make Money

FAQ’s on Zerodha Revenue Model

1. Is Zerodha good for beginners?

Zerodha has a very good user interface and is user-friendly. It is a great platform for beginners.

2. What is the revenue model of Zerodha?

Zerodha’s revenue model is discount breaking it charges a low commission. This feature attracts investors and particularly the budding ones. It is the reason behind the solid client base. Onboarding trades who engage in high volume trading gives income for Zerodha.

3. Does Zerodha make a profit?

With 5.7 million retail clients, Zerodha accounts for 15% of all retail trading, and last fiscal even generated around ₹2500 crore in revenue and about ₹100 crores in profit.

4. Is Zerodha really free?

Yes, delivery trades and investments in mutual funds are free on Zerodha. Zerodha can make money only from the active trades on this platform.

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