How Nithin Kamath's Rainmatter Fund is helping create a sporting nation

In June of this year, alarm bells sounded when a study published in The Lancet Global Health journal found that almost 50% of Indians had insufficient levels of physical activity. What’s more, last year, a similar study found 101 million Indians to be diabetic and 315 million with hypertension.

Therefore, it doesn’t come as a surprise when startups raise their hands with a willingness to tackle the problem of health and wellness head-on. That said, with a funding winter prevailing after a 2021-22 boom that drove valuations to new highs, support isn’t very easily forthcoming.

There are some though that are willing to fund businesses that can help people lead healthy lives. Rainmatter, the funding arm of ZERODHA, led by Nithin Kamath is one of the pioneers of supporting health and sports startups.

Building ecosystems of change

“Our philosophy is that for healthy living you need to have a healthy surrounding,” explained Rainmatter’s Dilip Kumar, in a conversation with The Bridge.

Rainmatter Capital, the venture capital arm of ZERODHA, which started by supporting fintech companies, began a ‘heath journey’ when the realization occurred that ‘helping people do better with their money was no longer enough.’

And so, the fund’s initiatives are now focused on building an ecosystem by helping companies grow by infusing capital and any other forms of help that they might need.

But why the emphasis on an ecosystem, one might wonder?

The answer lies in attacking a problem as a cohesive unit.  

“One company can’t solve for diabetes and one company can’t solve for a particular health issue that we have. It would take many companies to solve for the same problem. Our approach is to support these companies and build an ecosystem where Indians largely find alternatives and better options to stay healthy. That’s the goal here at Rainmatter.”

And entrepreneurs recognize the value of such ecosystems.

In January, when the news of FITTR (a leading fitness startup) having raised capital via Rainmatter emerged, Jitendra Chouksey, the founder was quoted as saying that the opportunity to collaborate in an ecosystem of similar-minded startups backed by the same fund was huge.

While the opportunity does exist, have the rules of the game changed?

Outcomes revisited

The Indian wellness industry is valued at a staggering $1,299.84 billion. While the traditional Private Equity and Venture Capital mindset might be to invest in a startup, operate it and then exit after five years, Rainmatter has a different approach.

“We help companies grow with patient capital,” explains Dilip.

The approach is a long-term investment strategy where investors are prepared to wait for a significant time before witnessing financial returns.

So, what then, is the yardstick of measurement for an investment made with this philosophy?

The thought process involves customers purchasing products and services are a starting point.

“Largely the intent is that whatever the products and services these companies are building, consumers have to buy it, they should adopt it and it should build some impact.”

And, as Dilip explains, if this impact were to translate to a healthier and fitter lifestyle for the consumer, the startup has made progress.

“The best yardstick of a company’s relevance is if customers are using the product and they’re paying for it and that should make them grow in a sustainable manner, that’s the yardstick.”

This philosophy is undoubtedly reflective of the startups that Rainmatter has supported thus far.

These include over twenty five startups in the health, wellness and sports categories. Prominent ones include Devils Circuit, FITTR, Gametheory and Ultrahuman, with new additions to the roster being Yoska, Fitpage and GoSports.

And for the fund, heathier consumers are far superior than all other monetary outcomes.

“If we can get our financial return, it's great but again that is not our primary motive. The primary intent is to make users get options, get healthier alternatives to stay healthy and get fit.”