• Zerodha is the new entrant in the Hurun list and ranks 108th on the global unicorn list.
  • Zerodha recently made headlines as the stock brokerage company gave itself a $1 billion valuation, without having ever gone out to raise money from investors.
  • Founder Nitin Kamath had earlier mentioned that the valuation would have been higher if they were valued as a technology firm.

Zerodha recently made headlines as the stock brokerage company gave itself a $1 billion valuation, without having ever gone out to raise money from investors. And now, the Hurun Global Unicorn List of 2020 values the startup at a whopping $3 billion.

Zerodha is the new entrant in the Hurun list and ranks 108th rank in the global unicorn ranking.

Earlier in June, the startup announced that it had decided to buy back the company’s shares given to its employees at a price that took the valuation of the online broking firm to ₹7,000 crore, nearly $1 billion. Even then the founder Nitin Kamath had said that the valuation is ‘conservative’, comparable to a listed peer like ICICI Securities, and backed by the strong growth in revenue last year.
And even with the high valuation from Hurun, Zerodha remains modest.

“Valuation etc really matter only if you intend to sell a portion of your company, otherwise it is just a vanity metric which doesn’t really mean anything. That said it is good to know that someone values us as much,” .

Kamath

Kamath had earlier mentioned that the valuation would have been higher if they were valued as a technology firm.
“Given our profitability in the last few years and price-to-equity margins this is a fairly conservative valuation from our standpoint. We derived this by looking at our closest publicly- listed competitor ICICI Direct and thought to be valued on similar lines. This number could have been much higher if we had been valued as a tech firm, rather than just as a brokerage firm as people value tech businesses based on growth,” Kamath told Business Insider in an earlier interview.

Zerodha’s growth has come even without any funding from an external investor, as the startup has remained bootstrapped since the last ten years.

Going forward, they have more plans in store to grow their business. Kamath said that they are also building features around nudging our users to trade and invest better via our platform. “For example, we recently added a nudge feature on Kite, our web trading platform, that alerts users if they are trying to place an order in a penny stock or illiquid F&O contracts, that can potentially be manipulated. We are constantly working on things which could help our clients make better trading and investing choices,” he had said.