The Story of a $4B Startup with Zero Funding and Zero Marketing

There's a $4B startup that:

• raised 0 funding
• spends 0 on marketing (11M users came organically)
• If today revenue goes to 0, it will still have 13 yrs of runway 🤯

Here's a story you never heard of:

— Aleksandr Volodarsky (@volodarik) March 6, 2023

1/ The Beginning

In 2002, Nithin worked at night & traded markets in the mornings.

Impressed by his trading skills, he got 1000s of dollars from clients to trade.

But at that time, there was no single online terminal to manage all the accounts simultaneously.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

So, he became a franchise of a big broker (Nikhil later joined him) to have 1 platform to trade shares from all his accounts.

He bumped into 2 problems:
• Offline operations made the process time-consuming.
• High fees.

To solve this, he built Zerodha.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

3/ Initial traction

To acquire the first 1000 users:

• He leveraged his offline connections.

• During his trading days, he ran some of the largest online trading communities. He shared it with them.

• He promoted it door-to-door.

Here are the other growth secrets:

— Aleksandr Volodarsky (@volodarik) March 6, 2023

a. Pricing

Earlier, brokers charged 0.005%/trade.

• Trade with $1000 > $5 fee

• $100K > $500 fee

But Zerodha launched a flat-fee model: Trade with any amount > $0.25 fee/trade.

They even made equity investment free.

This created virality & brought 1000s of users.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

b. Content Marketing

• They launched Zerodha Varsity, a free stock market & financial education institute, which gets 220K+search traffic/month.

The app has 1M+ downloads.

They even translated the content into a regional language to capitalize on lesser competition.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

• Zerodha has an online community (TradingQnA) where users solve each other's queries.

• They are big on social media: 587K+ YouTube subs, 350k Twitter followers, etc.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

c. Open-source APIs

Zerodha allows startups (trading/investing apps) to build on top of its APIs.

They invest in those startups and integrate them into their app.

The startups get access to a user base, while the co gets to provide more features to its users.

Win-Win!

— Aleksandr Volodarsky (@volodarik) March 6, 2023

d. Negative CAC

Zerodha's rivals spend $40-50+ to acquire one user and give new users free shares.

But it spends 0 on marketing & instead charges a $2.5 sign-up fee & $3.8 annually 😂

The aim is to weed out low-value users. This is one of the reasons for its high profits.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

e. Revenue-share affiliate model

Compared to its competitor's one-time cash-based referral strategy, Zerodha provides:

• 10% of the brokerage the person pays

• Free access to its paid tools

This persuades influencers to promote Zerodha over its rivals.

— Aleksandr Volodarsky (@volodarik) March 6, 2023

4/ Product Transparency

Zerodha keeps its users at the center. Literally.

One of its features is to nudge users to avoid trading penny stocks, sacrificing revenue.

It helps the user avoid losing money and trade safely

— Aleksandr Volodarsky (@volodarik) March 6, 2023