Communications apps that strike a chord with users across different markets are hot property these days, and it looks like another one of them may soon enter the so-called unicorn club. TechCrunch has learned that Truecaller — a caller ID app that now has 150 million users — is looking to raise around $100 million at a $1 billion valuation.
We’re hearing that Truecaller has hired Morgan Stanley to lead the process, and there are term sheets out. The round is likely to have previous and new investors.
The plan will be to use the funds to grow the product. Truecaller, founded in Sweden, has seen a lot of traction in markets like India, its biggest market at 80 million users. Now it wants to expand elsewhere, like the U.S., and will be building out the company’s office in the Bay Area. The company is projected to hit 300 million users this year.
Truecaller works by aggregating directory services via deals with white pages companies, and platforms like Yelp to bring in businesses. It complements this with crowdsourced information from the app’s users. That includes accessing your own address book, although you can opt out. Individual users can also opt out from being listed.
It then uses big data analytics and machine learning to offer additional services beyond caller ID such as predicting who you might want to call next based on where you are and what time of day it is, or what the top-reported spam number is in your area at the moment. Other features include spam blocking, directory services and “smart” SMS services.
The company makes revenues through in-app purchases for premium features, as well as advertising within the app. The company’s country manager for India has also reportedly said that Truecaller may launch a paid version by the end of this year.
Truecaller has been around since 2009, but the growing use of mobile phones across all markets has opened up new opportunities for the company. That has not only meant raising more money to take advantage of the bigger trend, but also spending more. Accounts filed in Sweden for 2014 show that Truecaller posted net sales of SEK6.7 million ($780,000) with a net loss of SEK84.646 million ($9.8 million), up nearly 400% on the year before.
What’s also interesting about this raise is what we’ve heard about some of the potential new investors. A source close to the company tells us that Twitter and Google are among the companies that have looked at investing. Twitter would invole both investment and partnership, from what we understand.
That would not be out of the blue. Twitter has already been working with Truecaller since 2013. And Twitter has been quietly building up Twitter Ventures as a way to invest in companies it works with. (That actually brings up a third connection between Twitter and Truecaller: Cyanogen, one of Twitter Venture’s investments, has a deal with Truecaller to bake caller ID into its handsets.)
Twitter’s deal with Truecaller lets users find people on Twitter via their phone numbers, and subsequently follow and Tweet to them via the Truecaller app. This helps Twitter drive more usage of its service, both from Twitter users and newbies. Growth is a priority for the company: in its quarterly results yesterday, Twitter added only 2 million monthly active users.
Truecaller’s earlier iteration focused on providing a mobile phone directory and caller ID service to users. That has been a compelling enough concept to have spawned rival services from the likes of Facebook and Google itself on Android. At the same time, Truecaller has been growing its scope, expanding features and functionality and developing a suite of related apps. These include the SMS app “Truemessenger” (currently only live in India) and an Android dialer called Truedialer.
As we have noted before, Truecaller has some things in common with another fast-growing communications app, WhatsApp. Like the Facebook-owned messaging app, Truecaller is a mobile-focused service with a lot of growth outside of the U.S., particularly in some key emerging markets. And also like WhatsApp, Trucaller’s service provides a way to cross the mobile silos that have grown up around platforms, carriers and apps.
The apps have been a hit in countries that have a high number of mobile users still using phones largely for calls — or apps that use phone numbers to connect people, like WhatsApp — but little in the way of directory services to help users find each other.
Spokespeople for Truecaller and Google Ventures declined to comment for this story, and Twitter did not return a request for comment.