Online broking unicorn Zerodha has committed Rs 1,000 crore ($120.9 million) for its startup fund Rainmatter in a structure that will allow it to remain invested forever, breaking the traditional venture capital structure of exiting.
“We are now increasing our commitment by increasing the allocation by an additional Rs 1,000 crore in a perennial structure or with the ability to stay invested forever,” Zerodha chief executive Nithin Kamath said in a blogpost on Thursday.
“We can remain invested forever, as the investments we make are from our own capital.
The perennial structure allows Zerodha to put in ‘patient capital,’ which does not have exit mandates.
“Good businesses cannot be built overnight, something we learned in our journey. So we are perennial investors and stick with the founders for as long as it takes to build a sustainable business,” Kamath said in a tweet.
Rainmatter, started by Zerodha in 2016, to invest in startups in the fintech space. Since inception, it has partnered with about 80 startups, investing about Rs 400 crore. Its portfolio includes fintech firms such as Cred, Jupiter, Mprofit, Wintwealth, health and wellness companies Noto Ice Creams, The Whole Truth, PeeSafe, climate-focussed companies Agnikul, Blue Sky, among others.
The profits from the investment will go back to supporting more entrepreneurs or Rainmatter foundation, in line with Kamath’s philosophy of “giving forward”.
Rainmatter will invest the fresh capital in sectors such as fintech, health and wellness, Climate change, environment and livelihoods, and storytelling and education.
