Bengaluru(India), 11/08/23: Nithin Kamath, CEO of Zerodha, has stated that the company has expanded its investment in its startup accelerator fund, Rainmatter. According to Kamath, the allotment has been enhanced by ₹1,000 crore.
He noted that the fund had invested about ₹400 crore in the last seven years.
According to Kamath, as Zerodha grew, they discovered that one challenge to answer was to help develop capital markets as well as boost access. He stated that a complete ecosystem was required to attain the goal. Rainmatter Fintech arose from the desire to assist startups.
Kamath elaborated on the matter and stated, “We have now partnered with over 80 startups and have invested close to ₹400 crores over the last 7 years. 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.”
He added, “We are now increasing our commitment by increasing the allocation by an additional ₹1,000 crore in a perennial structure or with the ability to stay invested forever.”
He said this while explaining that founders can benefit from patient financing with no exit mandates, especially when it takes longer for a firm in India to become robust and sustainable.
Using Zerodha as an example, Kamath outlined the reasoning for the perpetual structure. He stated that they believe Zerodha expanded as much as it did because they were free to build what they believed was correct without being pressured to grow quickly.
He said, “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.”
According to Nithin Kamath, the financial returns will be used to promote new entrepreneurs as well as the Rainmatter foundation. He stated that they shun board seats and instead assist as mentors and through collaborations.
Rainmatter by Zerodha invests in startups in finance, health and wellness, storytelling and education, along with climate change, environment, and livelihoods.
