Truecaller has taken in a whopping $60 million in its second investment round this year – it raised $18.8 million just 10 months ago.
As with the last round, Sequoia Capital is one of the investors, but Atomico, Kleiner Perkins Caufield & Byers (KPCB), Insight Venture Partners co-founder Jerry Murdock, and Stefan Lennhammer are also part of this Series C round. What’s more, Murdock, KPCB partner John Doerr, and Atomico managing partner Mattias Ljungman have all now joined the Swedish company’s board.
That’s a lot of money and lot of involvement from top-tier VCs for what began as a simple reverse-looking phone directory service, intended to help users recognise known spam callers. What are they after? Truecaller’s burgeoning social graph.
We’ve been tracking the Stockholm-based company for a while now. Its first big market was India, where it gained a large amount of traction by targeting Nokia users first, and a raised profile thanks to celebrity endorsements and senior politicians finding themselves listed in Truecaller’s database.
That was actually less of a problem than it may seem, as the service’s users generally want to find out which name is associated with a number, rather than the other way round. Nonetheless, it highlights how Truecaller expands its database – a combination of deals with public phone directory services, and Truecaller’s users uploading their personal contacts lists to the service.
Then Truecaller struck partnerships with Twitter and Yelp. So, if the caller is a Twitter user, the Truecaller user will also see their Twitter account as they receive the call; if the caller is a restaurant, they’ll see its pictures and Yelp rating.
All the while, Truecaller grew like crazy. In January 2013, it had 10 million users. Five months later it had 20 million, and in February this year it had 45 million. Now it has 85 million users and, according to CEO Alan Mamedi, more than a billion people listed in its database.
“Today our users are making 1.5 billion searches every month – it doubled in just a few months,” he told me in a phone interview. “We’re changing way you search and connect with people instantly. Compared with LinkedIn and Facebook, we solved major pain points.”
“The people you actually know”
That’s an interesting comparison to make – after all, Truecaller is a very different beast to those leading social networks. But Mamedi was adamant that the comparison made sense:
The way our users are using Truecaller is more replacing their contact book. They use it to know who’s calling them, to quickly get in touch with someone…
Our social graph is not built on top of Facebook or LinkedIn’s social graph – it’s based on who your contacts are in your local phonebook, which makes the graph or circle of friends more precise in the real world. On LinkedIn, people add me every day even though I don’t know them. Your contacts are the people you actually know. We see this more as the real world of communications and we want to make sure that when you want to get in touch with someone, there should be no friction around it.
When it announced its Series C round on Wednesday, Truecaller said it would use the $60 million to “fuel product development, hire new talent and expand the company’s global footprint” (it’s quite big in Brazil now too, apparently.)
It’s not hugely clear about how the service will evolve, though, apart from saying – in Mamedi’s words – that it aims to become “more of an intelligent way of managing your local and global contacts.” Global, he clarified, means contacts stored in Truecaller’s mega-database.
“But also in a more predictive way,” he added somewhat mysteriously. “Instead of typing in a name of a person, Truecaller should just know that for you.”
One thing that bothers me, I suggested to Mamedi, is the fact that the VCs are hurling cash at Truecaller’s social graph without there being a clear money-making strategy. Is there a plan to sell users’ profiles to advertisers, as Google and Facebook do?
Not at all, he stressed:
We haven’t focused on monetization yet, so it’s hard to say what will be our monetization strategy, but what I can say is our users’ data is our users’ data and it’s super-important that our users trust in our service. Whatever they do will be private and theirs, and we will keep that in our DNA, our culture. If we didn’t have that in our culture, we wouldn’t be where we are today.
When you meet professional VCs, the biggest difference I see is how they invest in entrepreneurs. Even if it might not be crystal clear to everyone, they believe in our vision of becoming the only search engine for contacts. It’s an exciting space. If you look at the way people manage contacts, everything is a mess today.
Could Truecaller find a role to play in identity management? “You could see it from that angle,” Mamedi replied. “We are building a platform to organize all the information that belongs to a certain person. In some ways it is a mobile identity platform.”
I’ll admit, I’m still uneasy about how all this information will be used, particularly as much of it comes from Truecaller users uploading their contacts’ information, not just their own – and also because there’s no clear revenue plan yet. Still, Mamedi is adamant about Truecaller’s ethics, so we’ll just have to see how this all plays out.