Best Unicorn- 2022 Zerodha Vs the rest of them
Big News: Zerodha posted its FY’22 numbers and ever since our minds have gone numb. But then again, it might be the winters, we’re not sure.
The country’s largest online brokerage house recorded an 82% rise in y-o-y revenue, reaching ₹4,963 Cr. ($654 Mn) and a whopping ₹2,094 Cr. ($276 Mn) in PROFITS.
To the uninitiated: Zerodha was founded by the Kamath Brothers (Nikhil and Nithin) back in 2010 with the mission to revolutionize the Indian stock brokerage industry. The company has never raised funds but still hopped on the Unicorn bandwagon by valuing itself at $1Bn for ESOP buybacks in 2020. As of Nov’21, the company valued itself at $2Bn, again for ESOP buybacks, per Nithin’s tweet:
Zerodha’s promising performance, got us wondering:
How strong is Zerodha vis-a-vis the VC backed Unicorn club of our country?
We collated the financial results of 84 Indian Unicorns for FY’22 (out of these 22 Unicorns are yet to post their FY’22 numbers. For the sake of comparison their FY’21 figures were considered).
Only 16 Unicorns posted a profit. The rest of the Unicorns recorded a combined cash burn of over ₹70,000 Cr. ($9.33Bn) 🤯
Zerodha’s profit of ₹2,094 Cr. is greater than the profit of the rest of the 15 profitable Unicorns COMBINED! You heard that right! These Unicorns, that includes the likes of Infra.Market, Dream11, PhysicsWallah and others, posted a combined profit of ₹1,791 Cr.
Zerodha’s closest peer, Groww (Est. 2016) recorded a net loss of ₹239 Cr. with -68% net margin. Ironically, Groww is valued more than Zerodha at $3Bn and has raised more than $400Mn till date.
Food for thought
Zerodha’s net margin of 42% on sales is the Proof of Concept for the rest of the tech-Startup Ecosystem. Think about it, the biggest bait that tech companies offer to their investors are high margins at the back of low incremental costs. That is what introducing technology to conventional businesses was supposed to achieve in the first place. And yet, the majority of the ecosystem appears to be failing at just that. Amidst a funding winter and a global tech slowdown, Zerodha’s numbers are a reminder to the rest of them that the winner in the end isn’t the one who bags the highest investment but the one who brings home the highest returns.🤔
This article is a part of the January'23 edition of our Startup Newsletter. Here's the complete publication: