Evaluating TrueCaller Business Model & How does TrueCaller make Money – UE Analysis
Fools day calls for a Foolish business model. So here it is! Truecaller is a Swedish internet company which has developed a crowdsourced global telephone directory. Truecaller provides a dynamic, real-time updated phone directory using the users and the internet scrapped (crawled) phone books thus providing high data integrity. The real reason for which everyone is interested in TrueCaller Business Model or How TrueCaller makes Money is because it gives away all caller information for FREE!
About TrueCaller, Funders, Founders and Facts
It was initially launched on BlackBerry in 2009 (yes it’s that old). After a good response by BB users, it launched for Symbian (Nokia) and Microsoft Windows Mobile. It was released for Android & Apple iPhone in 2010 (it is only after the smartphone revolution in 2011 that Truecaller really pulled off (but rather not quite), As of today TrueCaller has 100 million users worldwide.
TrueCaller really gained traction when it became crowdsourced, originally when it was just stealing user contact directory it was just collating data from elsewhere as well. But due to low numbers, it could not pull off as expected, only when they really started to scan everyone’s phone book and put a name to almost all numbers, it really went on to that famous J-curve.
TrueCaller Founders: Truecaller was developed by True Software Scandinavia AB, a privately held company in Stockholm, Sweden founded by Alan Mamedi and Nami Zarringhalam.
TrueCaller Funding: $150 million from Sequoia and KPCB (Kleiner Perkins).
TrueCaller Business Model
TrueCaller Business Model is Freemium + Advertising (Adsense) + Enterprise Business. That’s it! Go Play 🙂
Initially, they started with a paid app – that did not fly well and neither could they garner a large directory base for that they needed a free version which would be accessible by a large populace who would eventually then crowdsource information into their database and the rest is history!
TrueCaller Business Model via Freemium Model
TrueCaller makes most of its money from advertising but that is not it’s only revenue line.
There are other features like “Find a number” from name feature on the app where either you pay for the subscription or do some sort of download or watch a video (this used to be the case, I have removed TC from my phone long back and not sure if the download thing is still there). Basically, TrueCaller will get money on successful task completion by the user (CPA model).
The freemium really kicks in when you don’t want to see the ads displayed on the app while using, the ad-ridden app slows down the dialer like hell, so I ditched it.
TrueCaller Business Model via Advertisements
TrueCaller website and app put together run millions of impressions each day and thus are one of the most premium publishers for Google Adsense. If you are reading UE regularly you know who else is a premium publisher at scale. One is OLX and other is YourStory. Illegal sites like PirateBay use Dark Ad Networks who allow ads to be displayed on such websites as well.
They have prominent ad placements on the app (at the bottom of the dialer screen and the call log screen) and on the website (number check screen).
Going by the running ads that are contextual to TrueCaller and they run almost 1-1.2$ CPM – it should be at a run rate of 30-40$ million annual revenue just by ads. (500 million global subscribers – discount it by 50% = 250 million doing at least 10 interactions with TC per month at 1.2$ CPM = 36 million USD in annual revenue)
How does TrueCaller make Money
How TrueCaller makes money (non-advertisements) is via their Enterprise API. TrueCallers second largest revenue line is the verification API which nobody can power it like them because of the largest pool of verified numbers that their database has. So far it has tied up with Yelp (to show them the verified number of a business owner) which is a co-branding agreement so essentially the money saved in advertising is money earnt in brand recall. They recently opened up their Enterprise API to some startups. This is an example of Brand Licensing, which you can read more about here.
The pricing for the API ranges from $400 to $5000 (yes 5 thousand) per month. In India, Oyo Rooms, MobiKwik, CarDekho are some of the users of that API.
Basically, this API directly verifies the phone connected to the app and avoids the need of an OTP verification which can be bypassed (Yes, OTP verification can be bypassed very easily).
How does TrueCaller make Money via Enterprise SaaS
How does TrueCaller make Money via the Enterprise SaaS is that TrueCaller is trying to test out their “Face behind Number” API (above mentioned one) to prepare a used case for large enterprise clients like Telecom Operators (for shifting high usage clients to a competitor) and Government Agencies (to track miscreants) etc.
Once this API is fully functional and deployed via their TrueSDK they will announce it publicly and keep a subscription-based model on their website.
How does TrueCaller Work
How does TrueCaller know my number? Or for that matter Donald Trump’s? Well, when you sign up for it just to know who is calling, it downloads your entire phone book onto its servers and Boom! No more privacy. It runs an algorithm at the back end in identifying the correct person behind a number (by median analysis of multiple phone books), and report spam feature where the person being called can mark that number as spam and that gets circulated across the system. Important is how does it get to know as to which sector the number belongs to, I believe that is by bot scraping across the internet and tie up with Telcos to access the number range (like bin range of credit and debit cards).
Overall I believe Business model of TrueCaller is a real waste (Yes, Data is the new oil, but unprocessed Oil is really harmful for your health and Vehicle) – If you know what I’m saying 🙂
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