Truecaller seeks to raise $116 million in IPO

Truecaller cofounders Alan Mamedi (L) and Nami Zarringhalam

Caller identification firm Truecaller, which counts India as its largest market, aims to raise upto $116 million (1 billion Swedish krona) in its initial public offering on Nasdaq Stockholm, the company said on September 15.

The offering is expected to comprise new shares offered by the company and an offer for sale from certain existing shareholders who are selling a portion of their current shareholding of class B shares. After listing, founders Nami Zarringhalam and Alan Mamedi will control a majority of the company's voting power due to their ownership of Truecaller’s high-vote Class A shares, the company said.

Founded in 2009 by Mamedi and Zarringhalam, Truecaller claims to have 205 million monthly active users in India as of second quarter of 2021, citing company estimates and App Annie data. It claims to be the third largest communication platform in the country by monthly active users behind WhatsApp and Facebook.

Overall, Truecaller claims to have 278 million monthly active users (MAUs) across over 175 countries during the second quarter of 2021. It had about 227 employees across five locations in Sweden, India and Kenya at the end of 2020.

Among its key investors include Sequoia Capital India, Atomico, Kleiner Perkins, and OpenOcean. Sequoia India had first invested in Truecaller in 2013 and is currently the largest shareholder in the company with 19.9% stake as of December 31, 2020. Cofounders Mamedi and Zarringhalam own 9.2% stake apiece.

"Truecaller has made communication smarter, safer and more efficient across the world. As smartphone usage increases globally, fraud and unwanted communication has followed, and Truecaller has turned into an indispensable platform for consumers and businesses. With a clear focus on innovation and growth, Truecaller is on an exciting journey to reach even more users with even better products" said Shailesh Lakhani, Managing Director, Sequoia Capital India, who is also on the company's board of directors.

The Swedish firm said it had plans to use the proceeds from the offering for future growth, explore potential acquisitions and for general corporate purposes. Truecaller said this offering would create opportunities for accelerated growth in line with its strategy, increase its financial flexibility and broaden its ownership base. Further, it said the listing would also increase awareness of Truecaller and its operations.

"A listing of Truecaller is not only a milestone for Nami, myself and all of our employees who have contributed to building Truecaller to the fantastic platform that it is today, but also to the growing Swedish tech ecosystem. Even though we are twelve years into our incredible journey, we believe that this is just the beginning and we have a clear strategy to continue to grow and develop our services and products. I look forward to welcoming existing and new shareholders on this journey" said Truecaller CEO Alan Mamedi.

Truecaller has clocked revenues of $39.7 million (341 million Swedish krona) in India in 2020, registering a 79% growth from $22.2 million (190 million Swedish krona) in 2019. The country contributes about 69% of Truecaller's overall revenues.

Truecaller's total operating revenue grew to $57.4 million (492 million Swedish krona) in 2020, up 67% from $34.27 million (294 million Swedish krona) in 2019.

Operating revenue in the first half of 2021 reached $49.51 million (425 million Swedish krona), an increase of 151 percent compared to the first half of 2020. The growth was driven by an increase in its user base, steady improvements in the platform, and improvements in its business model monetisation, it said.