Truecaller: The Making of a Future Unicorn
How many times it has happened to you that you called somebody for the first time and they said hi! XY? Well, they don’t have your number saved but they just have the Truecaller app installed helping them sift through useful or spam calls. Started as just a caller identification app, Truecaller has surely grown into a gamut of services. It has been one of the great companies which start with solving one problem and grow on tackling other.
I happened to meet Alan Mamedi, the chief executive and Cofounder of Truecaller on his recent visit to Gurgaon, India when he told it’s the emerging markets which have given the true growth story rather than the developed ones. The company, in fact, shut down its operations in the US. Alan started the company in 2009 with friend Nami Zarringhalam, who happens to be the other co-founder. Together this happened to be the third startup of the duo, who met during their university days. According to Alan, “Nami and I wanted to solve a problem for ourselves and it turned out that other people also had the same problem. Truecaller was something we were passionate about. We learnt that Sweden is a very small market. We were always under the radar in Sweden.”
Headquartered in Stockholm, Truecaller will soon be completing 10 years of operations with an employee base of 200. Having 140 million daily active users around the world it raised the last funding round in 2018 at a valuation of more than $680 million. Previously it raised almost $80 million from the likes of Sequoia, Kleiner Perkins and Atomico. What an investor can add to a startup is an example set by Sequoia when the Indian counterpart invested in the Swedish company and brought it to India. India is the biggest market for Truecaller today. Sequoia invested quite a significant amount of money in 2013.
Alan says, “At that point Nami and I felt now this is serious. Now we have grown from being two guys in a kitchen to a real company. We are in Stockholm, Bangalore, Nairobi, Kenya. We used to have operations in the US, San Francisco. We decided to shut it down.” India today is the company’s biggest market. This year, Truecaller crossed the 100-million mark in terms of daily active users in India.
The App called Truecaller
Truecaller makes communication safe and efficient. It’s a platform of mobile identities. According to Alan, “We felt we should help users do more. With demonetisation we started looking at financial services. Can we make it safer and better, that’s when we started to build our own payment product.” When there is a transaction, there is always a conversation – has been the thesis behind this. Truecaller wants to build itself much more than messaging, helping small businesses many of whom use Truecaller. Whatsapp and Truecaller are the most popular among this community.
Recalling the investment from Sequoia, Alan says, “They asked if we wanted to have them on board. They understood the market. We haven’t been to India by then. For us it was like they can help us reach India, from market insights to correcting us I don’t think we saw it in hindsight but it was a really good decision.” In India, there are around 70 million people on UPI with a total population of 1.3 billion. Alan says, “This is a nascent stage. We have this great reach which no one else has. We should help the underserved. It’s not going to be like that the winner takes it all. The coming 5-10 years will shape it up.”
Talking about how India came to their mind, Alan laughs, “Before Sequoia we didn’t have the money to even fly to India. That’s why we have never been to India before Sequoia came on board. We knew India was our biggest market. UPI has certainly helped us a lot.”
Recalling one of those scenarios, Alan says, “I was in Delhi when demonetization happened on the same day. The Swedish delegation asked me if I wanted to come with them. We met people like Mukesh Ambani when a journalist came to me with a microphone asking what I think about demonetization. I didn’t even know its meaning. I saw people standing outside ATMs. It was insane. When I went back to Sweden I told them dude this thing is crazy and we need to go there. So we started following news more. For us, it was all about timing in some way. We were lucky in the sense that we already had a good product. All users came on Android. This was moving fast.”
When asked about monetization of the plaform which currently relies on advertising and premium subscription, the super app is relying on mobile payments and crediting option to capture the Indian internet market.