Nithin Kamath & Nikhil Kamath on Capital Allocation

Rainmatter, Zerodha's fintech fund and incubator, has invested in multiple startups with the explicit aim of expanding India's capital markets — a use of promoter cash that doubles as ecosystem-building and reinforces the firm's bet on financialisation as a multi-decade trend.

The note doubles down on Rainmatter's mandate to back Indian founders building for India, with Kamath arguing that current geopolitical conditions make homegrown startup support more important than ever — a thesis that repositions the firm's incubation arm as a national-strategy lever, not merely a corporate venture fund.

By 2020, Zerodha had self-assessed its valuation at roughly one billion dollars during an ESOP buyback — an internally-derived unicorn status that did not require a priced venture round and underlined the firm's insistence on validating worth from cash flow rather than from external marks.

A new hundred-crore rewilding fund, with the first project taken up in Maharashtra, marks an extension of the Rainmatter Foundation's remit from climate philanthropy into hands-on ecological restoration — evidence that the promoters are willing to deploy personal capital into long-horizon, low-returns work the conventional market will not fund.

In 2015, Kamath set up Rainmatter as a fintech fund and incubator backing startups in financial services, using Zerodha's own balance sheet to seed founders aligned with the broader goal of widening India's capital markets.

He also co-founded True Beacon, an investment management firm, with his brother Nikhil — extending the family-partnership model into asset management and reinforcing how the brothers have treated personal capital, trading acumen and product-building as parts of one continuous portfolio.

On IPOs, his view is contrarian: founders treat listing as an exit, but it is in fact the moment when obligations increase, because retail investors — lowest in the risk hierarchy — are now trusting the business, and the public-company posture should be to under-promise and over-deliver to avoid the volatility that destroys long-term decision-making.

The Rainmatter model, he says, is partly a response to the realisation that an efficient business destroys jobs indirectly — a Zerodha of 1,100 people might have needed 11,000 at a less efficient competitor — so the founders set up the climate and livelihoods foundation, seeding it with roughly a thousand crores, as a deliberate counterweight to the labour displacement that automation creates.