Rainmatter – Perennial investments
Around 2016 when Zerodha was slowly growing, we realised that a key problem to solve in the industry, which in turn had much wider impact, was to help expand capital markets at the same time as increasing access. We knew that this couldn’t be done by us alone and that it was necessary to collaborate with many, that an entire ecosystem with similar goals had to exist. That is how Rainmatter Fintech was born, with the goal of supporting startups helping people do better when investing and trading the markets.
As Zerodha steadily grew profitable, so did our allocation to Rainmatter from it. We have now partnered with over 80 startups and have invested close to Rs 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.
We are now increasing our commitment by increasing the allocation by an additional Rs 1000 crores in a perennial structure or with the ability to stay invested forever. Patient capital with no exit mandates that founders can benefit from when building an enterprise, in India specifically, where unlike in developed countries, it can take much longer to become resilient and sustainable.
Why a perennial structure?
We believe that the most successful businesses were those lucky enough to be in the right place at the right time, with products and initiatives suited to the market demands of that era. For instance, while we as Zerodha get a lot of credit for having helped expand the markets in India, we were also very lucky to be in the right place at the right time, just as the underlying markets were expanding to maybe the greatest bull market of India of all times. From 2010, it took us almost 7 years to catch our first big break. 17 years if I were to count my 10 years of market experience before Zerodha, which was an essential precursor to the Zerodha journey. So, we believe that the longer a business can survive and grow slowly and steadily, the higher its chances of getting lucky. Of course, there are numerous other variables and this may not work in all contexts, especially in highly mature industries.
Fundamentally, I believe Zerodha succeeded because we had the freedom to build what we thought was right, without pressure to grow quickly, especially at a time when the markets were growing slowly. This freedom also meant that we could constantly do what is right for the customer and what is right for the business in the long term. When the markets unexpectedly boomed, we were there, ready to get lucky.
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.
Most importantly, we see Rainmatter as our giving forward initiative. The goal of our investments is not just to generate financial returns for us, the profits from the investments go back to supporting more entrepreneurs and the Rainmatter foundation. 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.
Investments
We support entrepreneurs who are working on things that we care most about and can help India grow. Here are some of our larger investments.
Fintech – do better with money
Ditto, Digio, smallcase, Sensibull, Streak …
Health & wellness – make healthier choices
Devils Circuit, Ditch The Guilt, The Whole Truth, Peesafe …
Climate change, environment, livelihoods
Akshayakalpa, Solarsquare, Zerocircle, Ossus …
Storytelling and education: Inspire people to do better
Finshots, Learnapp, Signal, The Ken …
See our full portfolio here.
If you are an entrepreneur working on any of the problems above and are looking out for a long term patient investor and collaborator, let us know what you are building on our forum or e-mail us.
Best,
Nithin Kamath
Founder & CEO @ Zerodha. Partnering startups through Rainmatter. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter. | Personal website: https://nithinkamath.me
Quoting two beautiful sentences from this post
– Patient capital with no exit mandates that founders can benefit from when building an enterprise, in India specifically, where unlike in developed countries, it can take much longer to become resilient and sustainable.
– 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.
The magnitude of impact you have had on our lives is invaluable. We started building Fueler from a small town in Northeast India – Agartala, built an amazing community of close to 30K individuals now. Every day we hear from our people how “Proof of Work” has and is changing their lives for better opportunities and freedom.
Young founders like us are incredibly blessed and lucky to have inspiration like you, thank you for everything you are doing for the Indian Startup Ecosystem.
Hope to meet you in person one day. Much love and respect, Nithin sir 🙂
I am in traditional food business and have been working on to educate children about food via story telling. This has always been a dream for me to make local food intresting for kids. We got one comic also published for kids below 8 years to talk about health and food. Now don’t know how to take it further. If you can guide, we will be really greatful.
Regards
Hi Saroj- Please share more details at [email protected]. Look forward!
Well this is the first billionaire i have seen whi share his investments.
Great 👍👍
This is impressive!!! But sir we’ve been trying to get in touch with you regarding our project but there’s no response not even an acknowledgment!!! Please do look into it. Thanks and congratulations
Hi Preeti- We get a lot of inbound emails and the delay to acknowledge is not intentional.
You can send elaborate information that helps us to evaluate and touchbase sooner. Send details through https://rainmatter.com/
What ZERODHA does with Rainmatter is a giving-forward initiative to support passionate entrepreneurs to solve some of the most complex problems in our country and beyond. Creating this sort of giving-forward initiative creates a loop of supporting a few more founders through the established founders. This would be a game changer in the startup ecosystem, speaking my opinion, it was meant to happen a few decades before, and I’m glad to witness this change now with Zerodha.
This kind of initiative will broaden the founder’s perspectives about the business and will open a dialogue between founders to discuss their problems and share experiences and solutions, it might be a few simple problems as a founder your facing but having known someone interested to listen to your business problems and passionate about helping you out is the highest way of giving forward.
Requote: ” The odds of a good enterprise succeeding go up significantly when sensible founders who are passionate about it hold the reins”.
after reading this part of the expression, the word sensible founders struck me and reminds me of a quote I read a long time ago about a product, it goes like “Product is an emotion”. It can be felt only by someone who walks that journey and reminds us that behind every beautiful product, there is a founder who felt emotional while conceiving it and creating it. Such kind of sensible founders need to be backed, otherwise, we might lose great founders and teams like Zerodha.
Thank you for your initiative. I am really glad and blessed to find you and your team in the startup ecosystem as active and passionate entrepreneurs.
After Reading this I feel like sharing a quotation by Shiv Khera “It is the Moral Duty of every good person to become a multi-millionaire and billionaire. Why? Because Money in good hands always does good”
Nithin’s introduction of this distinctive investment program couldn’t be more timely. Truly, it’s perhaps the first of its kind in India and addresses a critical need. Given the nuances of the Indian market, an initiative focused on long-term outcomes, as described in this perennial structure, can offer immense value. As a proud member of the Rainmatter portfolio with MyLang, I can attest to the unwavering support and encouragement we’ve received from the Rainmatter team. As always, I am awestruck by Nithin’s authenticity, humility, and originality, which shine through in all his blogs/posts/podcasts.
We are working in the podcasting, content and storytelling domain, helping a lot of indie, regional and women creators earn through their content, without letting go of their IPs and at the same time, building an ecosystem where start-ups do not have to shell out a ton of money for their stories to reach their audience.
Would love to talk to you Nithin and Dilip and seek your handholding to turn our vision of creating sustainable livelihoods, a reality.
Regards,
Amandeep Singh