InvestorQ : Is it true that Zerodha has got a valuation close to $1 billion and is it sustainable?
sara Kunju made post

Is it true that Zerodha has got a valuation close to $1 billion and is it sustainable?

Answer
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3 months ago


If you go by the self assessed value of the company based on the latest ESOPs offered to its employees, then one can infer that the indicative valuation of Zerodha is closer to $1 billion. That may not be too surprising considering that most of the unicorns today are making heavy losses whereas Zerodha is a profitable company.

Zerodha will be giving out Rs.65 crore worth of money to buy back employee stock ownership plans (ESOPs) this year. That deal positions the company valuation closer to $1 billion. Zerodha has never picked up external capital over the years and it has always been a bootstrapped success.

Zerodha normally does the buyback 4-6 times its book value and values Zerodha close to $1 billion. Zerodha does not have any immediate plans to raise outside capital so valuations may not be too material as Zerodha prefers to grow on ploughed profits. To commemorate the completion of 10 years, Zerodha will give out these options.

Interestingly, Zerodha has been one of the few beneficiaries of the COVID-19. The company has always been a profitable business model and in addition, it has witnessed strong traction recently as over 3 lakh new sign-ups have been witnessed in the last 3 months. Recently, Zerodha saw signups to the tune of 300,000, mostly first time investors.