Zerodha‘s investment arm, Rainmatter Capital, has made a noteworthy move by allocating fresh capital of Rs 1,000 crore in a unique investment structure that doesn’t impose exit mandates on investors. This distinctive approach is designed to be advantageous for founders. The capital infusion is primarily aimed at sectors such as healthcare, education, and climate change. “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’s cofounder Nithin Kamath.

Established in 2016, Rainmatter has formed partnerships with more than 80 startups and has invested close to Rs 400 crore. “Patient capital with no exit mandates that founders can benefit from when building an enterprise, in India specifically, where unlike in developed countries, it can take much longer to become resilient and sustainable,” he added.  This model is particularly relevant in India, where it often takes longer for businesses to attain resilience and sustainability compared to developed nations.

Traditionally, venture capital investors seek to exit their investments within a span of seven to eight years, either through secondary sales or Initial Public Offerings (IPOs). However, Rainmatter’s approach involves a permanent capital structure that extends the duration of their investment in a startup. “Investors who bring in long-term patient capital investors who are willing to stick around and help in any way possible where the goal is to build a good, sustainable, long-term business and not just to generate rapid returns,” the blog said.

The core idea behind this approach is to attract investors willing to contribute patient, long-term capital. These investors are committed to supporting startups throughout their journey and are focused on fostering the growth of sustainable, enduring businesses rather than solely chasing rapid financial returns.

Rainmatter’s portfolio includes investments in various domains. These range from fintech startups like Smallcase, Ditto, and Sensibull to health and wellness startups like Devil Circuit, The Whole Truth, and Peesafe. Additionally, they’ve ventured into climate change and media startups, as exemplified by their investments in Akshayakalpa, Learnapp, Finshots, and The Ken.