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Zerodha steps up as angel investor

Rainmatter is more of an incubator than a fund, said the founder of a startup which raised funding from the initiative. Startups look for advice from Kamath and his backing reduces the ‘go to market’ time for the companies, the founder said.

, ET Bureau|
Updated: Nov 14, 2019, 08.47 AM IST
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Multiple founders of startups said that they share Kamath’s views that business growth should not be driven by spending on customer acquisition, public relations and marketing.
BENGALURU: Online stock-broking platform Zerodha has emerged as a significant investor in early-stage ventures, backing startups across investments, digital identification and others. Through its Rainmatter initiative, the bootstrapped, yet profitable company, has already invested in a batch of 14 startups in the fintech space.

The group includes Sensibull, which offers options trading; Smallcase, which facilitates stock investments; DigiO, which helps in paperless documentation, and Learnapp, which offers online educational courses in investment and trading. For Rainmatter, savings and investing are the underlying themes while it invests.

“We started making money in our core business only around 2014-15, after that Rainmatter was born out of our will to create an impact on the overall ecosystem through technology,” said Nithin Kamath, chief executive officer, Zerodha.

“Returns on investment in terms of money isn’t the primary goal; it’s the difference that these companies make that matters to us.” Nithin and Nikhil Kamath, the founders of Zerodha, started Rainmatter in 2016 using personal funds and it has a corpus of Rs 50 crore. “The corpus still stands at Rs 50 crore, but we have provisions to add more if required from our personal funds,” Nithin Kamath said. “The average amount that we invest in companies range from Rs 1.5 to Rs 7 crore,” he said.

Untitled
Rainmatter is more of an incubator than a fund, said the founder of a startup which raised funding from the initiative. Startups look for advice from Kamath and his backing reduces the ‘go to market’ time for the companies, the founder said.

“I was keen to have Nithin (Kamath) on the cap table, so we could take his guidance; they have built a great company (in Zerodha) and we could learn from them,” said Kunal Shah, founder of Cred, which raised a small amount of seed money from Rainmatter.

Multiple founders of startups told ET that they share Kamath’s views that business growth should not be driven by spending on customer acquisition, public relations and marketing.

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