By Abhay Ray 
Introduction
Zerodha, a name that’s become synonymous with investing for millions across India, processes a significant chunk of the country’s stock market transactions around 20%—thanks to its innovative approach to technology. Behind the scenes, this success is fueled by a unique blend of open-source tools, in-house solutions, and a philosophy grounded in first-principles thinking. In this post, we’re diving into the technology that powers Zerodha and why its strategy of building self-hosted infrastructure has been a key factor in the company’s impressive growth.
The Importance of Tech in Fintech
Operating in one of the most regulated and high-stakes industries, Zerodha faces the challenge of processing millions of daily transactions. Yet, it has not only risen to this challenge but thrived, achieving significant profitability, partly due to a strategic focus on building its own technology infrastructure.
An insider once shared that by self-hosting open-source tools, Zerodha has saved tens of millions of dollars. For comparison, while competitors like Coinbase spend a staggering $65 million a quarter just on observability, Zerodha’s more cost-effective approach has allowed them to reinvest those savings into further innovation and growth.
The Philosophy : First Principles, Independence and Agility
At the core of Zerodha’s tech strategy is a commitment to first-principles thinking. Each tool, language, and piece of infrastructure is chosen only after careful evaluation, ensuring that every decision is grounded in solving real-world problems.
- Cost Efficiency & Flexibility : Rather than relying on pricey managed services, Zerodha runs its critical databases (like PostgreSQL and ClickHouse) on basic EC2 instances. This not only slashes operational costs but also provides the flexibility to switch technologies as better alternatives emerge.
- Regulatory Agility : In a highly regulated space, changes can come without warning. Zerodha’s decision to manage its infrastructure means it can quickly adapt to shifting regulations, without relying on vendor roadmaps.
- Empowered Team Culture : The self-hosting decision extends beyond technology. It shapes the company’s culture, encouraging engineers to dive deep into the systems they build. This “hands-on” approach fosters continuous learning, technical innovation, and a culture that thrives on mastering complex systems.
The Stack : Tools and Technologies Driving Zerodha
- Backend Services
- Python : Used extensively in Zerodha’s early days for automating tasks like processing CSVs, Python remains a key player in backend services and data processing today.
- Go (Golang) : As demand for real-time data processing increased, Go became the go-to language, enabling Zerodha to manage thousands of concurrent websocket connections efficiently.
- Mobile & Web Front-End
- Dart & Flutter : Zerodha took a gamble on Flutter early on, and it paid off. The result is a unified, cross-platform mobile app that reduces development effort and ensures a consistent user experience across Android and iOS.
- Vue.js : On the web side, Zerodha uses Vue.js for its trading interfaces, offering a smooth and responsive experience that’s both easy to maintain and scalable.
- Data Management & Analytics
- PostgreSQL & ClickHouse : PostgreSQL forms the backbone of Zerodha’s transactional data storage. As the amount of data grew, Zerodha introduced ClickHouse to handle massive, immutable financial data with greater efficiency and speed.
- Redis : Zerodha uses Redis for caching, keeping their applications agile even under heavy load.
- Grafana & Victoria Metrics : Instead of spending vast amounts on SaaS tools like DataDog, Zerodha built its own observability stack using Grafana and Victoria Metrics, gaining better control and significant cost savings.
- Messaging & Orchestration
- Kafka & NATS : Kafka handles high-throughput, centralized messaging, coordinating millions of events per second, while NATS is used for lightweight, low-latency internal communication.
- HashiCorp Nomad & GitLab CI/CD : Zerodha uses Nomad for deployment orchestration, efficiently managing deployments across EC2 instances, while GitLab CI/CD ensures rigorous testing before any code goes live.
- Self-Hosted Open-Source Tools – Zerodha’s self-hosted, open-source ecosystem is vast and includes:
- OS Ticket : A reliable ticketing system in use for over 12 years.
- ERPNext & Frappe : These handle back-office operations, offering flexibility and freedom from vendor lock-in.
- Airflow & Listmonk : Handling ETL workflows and sending high volumes of emails (sometimes up to 10 million a day) efficiently.
- Discourse, Haraka, and Mattermost : These tools power everything from community forums to self-hosted email and analytics.
- NextCloud & Password Managers : Ensuring secure cloud storage and effective password management.
The Benefits of Self-Hosting : Freedom, Savings and Flexibility
Zerodha’s decision to self-host its infrastructure has proven to be a game-changer, providing them with both technical and financial advantages.
- Cost Savings : By self-hosting critical services like databases and observability tools, Zerodha saves millions compared to competitors relying on managed services.
- Vendor Independence & Flexibility : Self-hosting means Zerodha isn’t bound by the roadmaps or limitations of third-party vendors. They can swap technologies as needed without any friction.
- Empowering a Hacker Culture : With engineers involved in every layer of the tech stack, Zerodha nurtures a deep understanding of their systems. This hands-on culture drives continuous improvement and innovation across the organization.
- Regulatory Adaptability : When regulatory changes happen, Zerodha can quickly implement necessary adjustments to stay compliant—without waiting for vendors to catch up.
Key Lessons for Aspiring Technologists and Startups
Zerodha’s journey offers some invaluable lessons for anyone building tech in today’s fast-paced world :
- Embrace Complexity : Rather than hiding behind managed services, invest the time to understand the complexities of the systems you’re building. The insights gained are invaluable.
- Prioritize Flexibility : Build modular systems that can adapt as needs evolve. Whether it’s changing databases or overhauling a messaging system, adaptability is key.
- Self-Hosting Doesn’t Mean Overhead : While self-hosting can be daunting, Zerodha’s experience shows that it can be incredibly cost-effective and rewarding in the long run. It offers opportunities to learn, innovate, and save on managed services.
Conclusion
Zerodha’s tech stack is a prime example of balancing innovation with practicality. By combining modern programming languages, powerful open-source tools, and a commitment to self-hosting, Zerodha has built a robust, scalable, and cost-efficient system.For anyone at the intersection of fintech, technology, and self-reliance, Zerodha’s journey sends a clear message: Build smart, stay flexible, and never stop exploring better ways to solve problems.
GMICapitals.com RaysVeda.com GetMyStartup.com LawCanal.com GetMyIndia.com ZinCob.com Angeltors.com