Zerodha + Rainmatter, what is it all about?


#1

I just received this in email, has things about rainmatter, APIs, Coin, etc. What is this all about? I did check out http://rainmatter.com/, @nithin can you explain? Zerodha + Rainmatter, what is it all about?


Fintech startup idea - Could you please explain the details?
#2

As Zerodha we are probably the best place in India for someone to trade if the person has an intention to trade because of our platforms, pricing, and transparency . We are also the best place if someone has an intention to learn about trading because of Varsity, zconnect, and tradingqna, and all the effort we take in educating.

ps: I have a vested interest in saying this. :wink:

The problem though is, there are only 3 to 4 million Indians who directly invest in the markets (intention to trade), and only very few people actually spend time learning.

So, how have traditional brokers been growing the market over so many years?
The typical strategy has been by pushing advisory. An employee of broker calls up promising very good returns, and client gets greedy and is sold to the idea. And once there is a person advising due to an incentive linked to client trading, you know it is harmful for the client. I’d blame the very shallow market participation to these practices followed for many decades.

So if people don’t want to learn, advisory is not really the way, how do we grow the market?

As a business we have evolved. We started off saying we are only for F&O traders, and then went on to do things to attract investors as well. But the real problem to solve in India is to find ways to attract the next 10 million Indians to the market. As a business, we have decided to very clearly stay as an execution platform only. We decided to partner with startups who are looking at solving this problem.

We opened up APIs to every aspect of our business (what we call broking as a service). We said, if you have an idea that can potentially grow the market, why do you want to go build a brokerage business grounds up. Building a brokerage business takes 1+ year to get license, another 1 year to set the tech stack, need people to onboard in different cities, regulatory/compliance requirements. We said, why don’t you just leverage everything that we have built as Zerodha. More importantly we say, that if it is a product worth showcasing,
we will to our 350,000+ clients.Thanks to businesses like Ola/uber (who don’t own a single taxi) or Airbnb (who don’t own a single property), this idea appeals to new age startups - person who owns the user experience owns the client.

We also decided to have our skin in the game, so that we have a vested interest in such ideas making it big. We allocated around Rs 35 crores from what we have earned to invest into such businesses (with a max of around Rs 4 crores per startup). Essentially acting as strategic investors. We call the entire initiative as Rainmatter.

So startups like smallcase who are building almost a quasi ETF market (main investing vehicle in developed markets), balance who are trying to push millennials to save impulsively, Digio who is making onboarding easy, and more…

We have now also opened up APIs to Coin - our direct mutual fund platform. So if there are startups who think there is a disruptive user experience that can be built over this to attract investors, we’d love to partner.


#3

Hi Sir ,
Blockchain is most disruptive technology which can change Finance, Banking and property transactions. There are 100 of Banks which are working on same including RBI. I know its really hard to fit it in laws and regulations but there are few things which we can easily start like cryptocurrency and digital assets. We can easily setup cryptocurrency buying facility.


#4

Yes, it is not a very complex business to setup. The only issue is around regulations. RBI has put out two press releases around this warning about the risks. Feb 2017, Dec 2013.

There is a huge regulatory risk setting a business around crypto currency, imagine you get up tomorrow morning and RBI puts out a restriction.


#5

I think Zerodha gets it. India has been a broker led society. We have a broker for everything. The reason was access and license raj. Technology democratizes access and hence, merely access cannot be a product anymore. I think slowly we will see people becoming self-service driven as India digitizes. The consequence will be people will make more independent decisions which will greatly benifit platforms that provide information to trade on rather than getting a call to trade.


#6

Can you share the link for Coin API?


#7

what does API mean?


#8

It is the same Kite connect API for authentication and etc. Order placing on coin is once a day, so you can essentially give a csv dump. You can send email to talk@rainmatter.com, someone will get back to you.


#9

Check this.


#10

I agree but major improvements and innovation required to become ‘only best’ broker in India.


#11

Can’t we take a risk? How much loss you will incur if RBI puts restriction?


#12

RBI puts a restriction, you will have to essentially stop the business. Issue with pushing crypto currency as an asset class is that all the people whom you might drive to invest into it might have issues if RBI puts restriction. That’d not be a great place to be in as a business.


#13

People from talk@rainmatter.com almost never respond. I have atleast 3 questions still pending a response …


#14

hmm… thats weird. @Nikhil.A can you check.


#15

Yeah - but here are the questions anyways in case someone wants to answer for all as these are pretty generic.

Asked on 25th May - Can I by paying extra get level 2,3 order book data from Zerodha API ?
Asked on June 14th - What is the frequency of data throughput for realtime data. How do you choose which tick to pass on api since its not tick-by-tick data.
Asked on June 24th - How can someone implement multiple instruments for the same underlying using kite publisher


#16
  1. Data what you get on kite connect is essentially what you see on your trading platform. This can’t be compared to NSE’s data vending products. What you see on trading platform is like a level 2 data (5 market depths), but it won’t match upto the quality of what you get by buying that data directly from the exchange/exchange vendors. NSE level 2 and level 3 data will have more ticks as compared to data that brokers provided from what is captured on the broker connection with exchange. To buy this, you will have to contact data vendors empanelled with exchange, this can be quite expensive.
  2. If we receive multiple ticks in 1 second, tick to be sent to trading platform/through kite connect is randomly selected. No logic behind this.
  3. Using the basket feature:. Check the demo basket button here: https://kite.trade/publisher-demo

#17

Cryptocurrencies will be legal by last week of july


#18

@nithin thanks for clarifying. I have couple of questions

  1. Can you please post some examples of MF orders that can be posted using the kite connect API.
  2. Is there a kite API simulator (or sandbox) that can be used for prototype development before going live with kite connect?

#19

hmm… you should disregard all such news sources unless it is spoken by someone in office. Check that link, they have written this article by giving credit to a news reporter on CNBC awaaz. If you see that link, the reporter is saying that it will be announced by May end. It is June end, nothing out yet right?


#20
  1. We will put it out soon. You can reach out to nikhil.a@zerodha.com (@Nikhil.A) . We can get you to speak to the developer
  2. Sandbox is still not there, but we are working on it.