At the time, India’s biggest brokerages were operating with technology from the early 2000s or older, and users were paying high commissions for trading platforms that were clunky and cluttered, according to Kamath. The siblings saw an industry ripe for change. After a series of roles in the securities industry, including a five-year stint as a sub-broker at Reliance Commercial Finance Ltd., Kamath quit to start Zerodha with his younger brother, Nikhil. In his teens and early 20s, he would trade by day and work for about $1 an hour in a call center at night. Zerodha - a portmanteau of zero and rodha, which means obstacles in Sanskrit - is the brokerage Kamath wishes he had as a young investor. “Zerodha has a superior platform,” said Madhukar Ladha, an analyst at HDFC Securities Ltd. More than 70 per cent of the firm’s transactions come from mobile devices. Zerodha now has an industry-leading 909,000 active traders, about two-thirds of which are 37 or younger. The model is hardly unique - Robinhood has a similar strategy in the US - but Zerodha was among the first to deploy it in India, where rising wealth and smartphone use have fostered a fast-growing market for fintech startups. Zerodha has no marketing budget, relying instead on word of mouth to attract new users, he said in an interview. Kamath, 39, attributes Zerodha’s success to the Google-like simplicity of its platform and the firm’s ability to undercut competitors on price because of low operating costs. The firm’s rapid rise has not only made Kamath rich, it’s spurring the industry’s old guard to rethink its approach and turning Zerodha into a case study for how financial companies can lure young customers in fast-growing emerging markets. Thanks to a slick, mobile-friendly platform and rock-bottom commissions (some equity trades are free), his brokerage, Zerodha, has become a hit in a country with the world’s largest millennial and Gen Z populations. With markets still reeling from the global financial crisis, he struck out on his own to start an online brokerage from a 700 square-foot office in Bengaluru. So in 2009, Kamath did something radical. After a decade working as a trader and a broker in India, Nithin Kamath was burned out and frustrated with a securities industry that seemed stuck in the past.
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