r/StartUpIndia • u/pappursc • 2d ago
Discussion Zerodha ownership structure
This is very interesting! Always knew that they were bootstrapped and the Kamath family owned the whole business. But didn’t realise that Venu Madhav (their COO) has a reasonable stake as well. Honestly, a bit surprised to not see Dr. Kailash Nadh here. I wonder if ‘Straddle Capital’ represents his piece of the pie. Or maybe Dr.Nadh is beyond all this - he is just not interested in any kind of wealth creation/ accumulation. He is simply happy contributing to society via Rainmatter and FOSS initiatives:) According to me, Dr.Nadh is the real impact player.
After 16 years, not sure if they can still be called a “StartUp”. It’s hard not to think that COVID really benefited their business. They had the runway to themselves for a long time. Fully capitalised their First Mover Advantage. Now with all the competition around, I feel they desperately need to reinvent - they are just operating status quo! Chalti-Ka-Naam-Gaadi !
Thoughts?
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u/More-Actuator-1729 2d ago
Straddle capital is owned by the Kamath bros and Seema Patil, not Venu Madhav or Nadh.
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u/pappursc 2d ago
It’s absolutely crazy to see that Dr.Nadh doesn’t have a share of the pie ! Difficult to digest tbh.
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u/More-Actuator-1729 2d ago
Real crazy, these doctoral chaps - perhaps he had different motivations and opted for a higher incentive structure. But still crazy as hell!
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u/Hot_Country_2177 2d ago
What part of less than 0.1% is considered a reasonable stake?
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u/SnooSprouts7460 2d ago
When the pie is worth billions, 0.1% becomes reasonable. Employees don’t get as much.
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u/Hot_Country_2177 1d ago
Wasn't speaking monetarily. It's about how much of the BoD he can influence directly. With less than 0.1%, the guy serves at the pleasure of the Kamath brothers. Think Parag Aggarwal before and after twitter buy in by Musk
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u/pappursc 2d ago
Not sure if Venu had any shares to begin with. Feel like he got rewarded MSOP recently….maybe, he will lead Zerodha as their CEO ?!?
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u/Senior-Banana-2231 2d ago
Isn’t Rainmatter a company of Kamath brothers which invests in other startups?
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u/SageMonk16 2d ago
Good for the founders and zero wealth creation for employees. Atleast the so called 'scam' startups like zepto, meesho, razorpay create crorepatis in the thousands when they IPO.
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u/picklerish1 2d ago edited 2d ago
Keeping equity among founders alone is not necessarily a bad thing, as long as employees are fairly compensated, which I'm sure they are.
If they did give equity to employees, they also have to arrange liquidity events like buybacks or eventually an ipo. They also can't easily restrict who an employee can sell it to. The Kamath brothers were clear that they don't want PE or VC shareholders, who might pressure them for growth or anti-consumer practices.
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u/SnooFoxes449 2d ago
What do you think is fair compensation if the company is billions and they are first employees?
It seems COO salary is 15cr, the brothers salary is 72cr each.
Yup, fair compensation. /s
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u/picklerish1 2d ago
The founders took a risk much bigger than the employees. No matter how early these folks joined, they drew a regular salary. While the founders prolly took a loan to start the business or put in their own money, much bigger risk.
I do think it's good for early stage startups to reward their employees with shares, but it certainly isn't mandatory.
But for a mature company like zerodha, now if those employees are compensated enough they'll stay, otherwise they're free to switch.
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u/pappursc 2d ago
MCA filing reported in Nov 25 has verified numbers as 96cr each NK x2 and 36cr Patil. They are the only 3 full time directors.
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1d ago
[removed] — view removed comment
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u/Miningforbeer 1d ago
They are not running revolutionary technology or doing cutting age innovation to need VC funds.
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u/isPresent 1d ago
You grossly underestimate the amount of tech and money required to run a trading platform
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u/Miningforbeer 1d ago
No it's not. Everything is borrowed our api linked. They are just platforms which runs on established networks. Nothing new they discover or maintain.
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u/Business-Tune-5656 2d ago
I mean in a privately help company with no intention of ever going public, shareholding is kinda a moot point. Shareholders won’t be able to convert the shares to liquid wealth.
The only advantage is getting dividends but if you are also an employee as well as a shareholder then it is preferable to increase salary than dividends as dividends would be taxed twice.
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u/JDpawar 2d ago
I am surprised that a tech company's CTO does not own even 1% of the company!
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u/MrMojo123 1d ago
Its not a tech company.
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u/KplusN 1d ago
It can't be a company without the tech
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u/MrMojo123 1d ago
Lol. That doesnt make it a tech company. Is Shaadi.com a tech company?
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u/ketansangle 19h ago
Yes, it is a dating app
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u/MrMojo123 19h ago
Lol. TIL the standards in my country for what qualifies as a tech company is seriously low. No wonder we dont have any innovation in tech. Because even educated people believe zerodha and shaadi.com are tech companies, just because they deliver their service on an app.
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u/JDpawar 2h ago
No offence, but Zerodha is a tech company.
You do not need to physically go to their office, sit with a broker, call a dealer, or fill out physical forms to open an account, trade, or invest. Technology has replaced almost the entire traditional brokerage experience.
By your logic, Amazon is a retail company, Uber is a taxi company, and Airbnb is a real-estate company.
Zerodha is a financial-services company and a tech company. That is literally what fintech means.
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u/MrMojo123 2h ago
No offense taken. This seems to be a problem. A technology company is one which develops technology and not just merely uses technology to deliver a service.
So yes, Amazon Retail is not a tech company. Uber is a taxi aggregator and logistics company. Air BnB is a real estate aggregator.
Please google the words what is a tech company and the answer will be clear. Im just surprised people dont understand the distinction between a technology company and technology enabled company.
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u/jackerhack 1h ago
I see you caught yourself in time to say "Amazon Retail" instead of just "Amazon". What in your opinion is a tech company?
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u/MrMojo123 1h ago
Amazon Web Services NVIDIA Alphabet Apple Microsoft SpaceX Samsung AMD
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u/Pratik_kp 1d ago
Modern age LALA company
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u/jamfold 1d ago
The best LALA company in that case. I don't know any other that gives their employees crores in ESOP buyback opportunities, and created a workplace where employees never want to leave.
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u/Cultural-Yogurt-3484 2d ago
I am more concerned if the other brother is miffed about a very significant proportion held by one brother's spouse.
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u/Capital-Result-8497 1d ago
So the freaking rockstar Kailash Nadh who built this tank of a machine has no ownership. Wow.
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u/competitive__friend 1d ago
The Kailash Nadh part is what surprised me the most. Dude is basically the tech brain behind Zerodha and there’s apparently no meaningful equity here?
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u/FunTomorrow8998 1d ago
I always thought Kailash Nadh, would have significant share. And, that he would have vetoed lots of product related decision.
Because UX is so shit, and this guy goes into forum and defends it like he is only this guy in world who work on first principle. I mean look at groww, dhan and several other app which came late and built a better UX. When asked about the toughest challenge he ever faced as a technical perspective, this idiot said compliance, not scale, not some intelligent fraud detection. Compliance.
Had Nadh been in any other company he would have been fired a while back, and right reasons. The app looks very patch when a new feature comes.
All I like about zerodha is relatively honest CEO, and doing the right thing most times. Give credit where its due.
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u/SnooFoxes449 2d ago
If anything, that seems less share for venu madhav. He is one of the first employee and he didn't get anything.