Zerodha allocates an additional Rs 1,000 crore to back startups through Rainmatter

India's largest stock broker, Zerodha has allocated an additional Rs 1,000 crore ($121 million) towards its startup accelerator fund Rainmatter, even as it follows what it calls a ‘perennial investment’ structure for the fund with no exit mandates, the company said on Thursday.

In a company blogpost, Zerodha founder and chief executive Nithin Kamath said that it has now partnered with over 80 startups, investing close to Rs 400 crore over the last seven years.

Rainmatter was launched in 2016 to back innovative startups in the financial technology space, helping individuals invest and trade better.


“We believe that founders can similarly benefit from investors who bring in long-term patient capital—investors who are willing to stick around and help in any way possible, where the goal is to build a good, sustainable, long-term business, and not just to generate rapid returns. We can remain invested forever, as the investments we make are from our own capital,” Kamath said in the blog post.


The profits from the investments made by Rainmatter Capital go back to supporting more entrepreneurs and the Rainmatter Foundation, the company’s non-profit arm, he added.

Under the fund structure, Zerodha invests up to Rs 50 crore in an upcoming venture, but does not take a board seat or participate actively in the business.

With time, the startup accelerator has increased its purview to back technology entrepreneurs making an impact across segments such as education, health and even climate.

“While we started out by backing tech entrepreneurs who were helping people do better with their money, it has now extended to those helping people make healthier choices, getting educated, and those who are working on the much harder problems of climate change and creating livelihoods,” said Kamath.

With its Rs 1,000 crore infusion into Rainmatter, and around 80 investments, Zerodha becomes one of the largest Indian startups to have a tech-focused fund for early stage companies.

Rainmatter has backed the likes of insurtech startup Ditto and investment platform Smallcase, among others in the fintech segment. It has also funded The Whole Truth and Peesafe in the health and wellness space as well as Akshayakalpa and Solarsquare in the climate segment.

Over the past years, Zerodha has also partnered with its incubated startups such as Smallcase, backed by Rainmatter, to bring newer offerings to its users on the platform. Zerodha is launching its own asset management company in partnership with Smallcase.

Some of its companies have gone on to raise larger institutional rounds too. Identity verification startup DigiO raised almost $12 million from wealth tech startup Groww in December last year. Rainmatter had invested in DigiO back in 2016.

For tech startups to launch their own venture arms is not new. Flipkart has a $100 million fund under Flipkart Ventures, aimed at Indian startups. American tech major Amazon has an India-focused venture fund of $250 million. Players like Razorpay and Groww also invest in tech companies but do not have a dedicated fund corpus as such.

“The odds of a good enterprise succeeding go up significantly when sensible founders who are passionate about it hold the reins. We thus avoid taking board seats or being involved in the operations of businesses that we partner with, and instead, we help, mentor, and collaborate,” added Kamath.

ET had reported on April 11 that the Bengaluru-headquartered brokerage is expected to clock total revenue (including interest income from its own investments) of around Rs 5,956.8 crore and net profit of Rs 2,513.6 crore in fiscal year 2023. These numbers were not audited.