Zerodha co-founder Nithin Kamath has revealed that long before building one of India’s largest stockbroking platforms, he spent nearly two years associated with what eventually turned out to be a pyramid scheme.
In a post on X, said watching the web series Pyramid Scheme on Prime Video brought back memories of his late teens, when he was searching for ways to raise money to fund his trading account. The experience, he said, shaped his views on and reinforced a lesson that continues to guide him today: there are no shortcuts to creating wealth.
“When I started my career at ~18, I was trying to find ways to fund my trading account. For about two years, I got drawn into a multilevel marketing company that turned out to be a pyramid scheme. I don’t think I was deceived by the person who introduced me, but by the company itself.”
Kamath admitted he was not merely a participant but had also introduced several others to the company before the scheme collapsed. Looking back, he said the series’ depiction of the moment when the fraud unravelled accurately captured the desperation experienced by those caught in such scams.
Pyramid schemes are still thriving
What surprised Kamath even more was discovering that pyramid schemes remain widespread despite greater financial awareness and increased market participation. Citing industry estimates, he said around two new pyramid schemes are launched every day in India. More than 5.5 crore Indians had reportedly lost their savings to over 5,300 such schemes, with estimated losses of ₹10 lakh crore as of 2015—a figure he believes is likely much higher today.
The co-founder said his personal experience taught him that extraordinary promises of wealth should always be viewed with caution, whether they involve investing, trading or business opportunities.
“One truth my experience has taught me: there is no quick way to make a lot of money, be it trading or any other business. Anything promising returns higher than a comes with risk. The higher the claim, the greater the risk.”
Kamath also drew parallels between pyramid schemes and the growing perception that making money in the stock market is easy. He said social media and word-of-mouth have encouraged many first-time investors to believe that quick profits are the norm, even though markets often punish unrealistic expectations.
He cautioned that losses in equities rarely arrive dramatically but instead accumulate quietly, one investor at a time, making it easy for people to underestimate the risks involved.
Ending his post with a blunt warning, Kamath urged people to avoid any opportunity that rewards recruitment over genuine value creation. He drew a parallel between pyramid schemes and the narrative surrounding stock market investing. Kamath warned that the promise of easy profits has lured many first-time investors.
“This dynamic has also played a big part in the recent growth of retail markets, people spreading the word that it’s easy to make money in stocks. It isn’t, and the reckoning tends to come quietly, one account at a time. And if someone tells you that you can make easy money just by introducing others, run. Almost every single one of those is a fraud.”
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