Truecaller intends to list its Class B shares on Nasdaq Stockholm

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Truecaller AB (publ) (“Truecaller” or the “Company”), the leading global platform for verifying contacts and blocking unwanted calls and messages, today announces its intention to launch an initial public offering of its Class B shares (the “Offering”) and to list its Class B shares on Nasdaq Stockholm (the “Listing”). The Offering is expected to consist of new Class B shares issued by Truecaller and of existing Class B shares in the Company.

Truecaller’s Board of Directors and management, including co-founders Alan Mamedi and Nami Zarringhalam (together the “Founders”), Sequoia Capital India, Atomico and Kleiner Perkins, believe that the Offering and listing of the Company’s class B shares on Nasdaq Stockholm is a logical and important step in the Company’s future development. The Offering will create opportunities for accelerated growth in line with the Company’s strategy, increase the Company’s financial flexibility and broaden Truecaller’s ownership base. The Board of Directors and management further assess that a listing of the Company’s class B shares on Nasdaq Stockholm will increase awareness of Truecaller and its operations as well as enhance the Company’s profile with investors, business partners, customers, employees and other important stakeholders. In addition, the Offering allows existing shareholders to sell a portion of their current shareholding of class B shares and thereby create a liquid market for the shares.

Truecaller is backed by prominent investors including Sequoia Capital India, Atomico, Kleiner Perkins, and OpenOcean. As a founder-led company, the Founders will, after the intended Offering and Listing, control a majority of the Company’s voting power as a result of their ownership of Truecaller’s high-vote Class A shares.

Nasdaq Stockholm's listing committee has made the assessment that Truecaller fulfils the applicable listing requirements for a listing on Nasdaq Stockholm. If Truecaller submits an application for admission to trading of the Company’s Class B shares on Nasdaq Stockholm, Nasdaq Stockholm will approve such application, provided that certain conditions are fulfilled, including the distribution requirement. Depending on market conditions, the Offering and Listing on Nasdaq Stockholm is expected to be completed during the fourth quarter of 2021.

Alan Mamedi, CEO of Truecaller, comments:

“One of our objectives this year has been to prepare Truecaller for an IPO. Thanks to the strong feedback that we’ve received from potential investors, it feels very exciting to take the next step in this process. 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.”

Bing Gordon, Chairman of the Board of Directors of Truecaller, comments:

“Truecaller has developed into the leading global platform for verifying contacts and blocking unwanted calls and messages. To list the company and broaden the shareholder base is a natural next step for its development. The Board of Directors is proud to have supported the founders and the employees who are developing the platform to help more people and companies focus on who and what’s really important. I am certain that Truecaller is just getting started.”

Shailesh Lakhani, Managing Director, Sequoia Capital India, comments:

“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.”

Niklas Zennström, Founding Partner and CEO, Atomico, comments:

“What I admire most about Alan and Nami is their tenacity. They have faced several challenges over the years as they built Truecaller, and always came back stronger. This is an important next milestone for the company and I am so happy to see another global category leading technology company emerge from Europe. Alan and Nami are living proof that contrarian founders are well suited to building successful companies, and I am honoured to have been able to share part of that journey with them since 2014.”

The Offering in brief

Should the Company proceed with the Offering, the Class B shares will be offered to:

• the general public in Sweden; and
• institutional investors in Sweden and abroad.

The offer to institutional investors will only be made (i) to certain institutional investors outside the United States, pursuant to Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”); and (ii) in the United States, only to Qualified Institutional Buyers (“QIBs”) in reliance on Rule 144A under the U.S. Securities Act.

The Offering is expected to consist of existing Class B shares, offered by certain existing shareholders, and new Class B shares issued by the Company that are expected to provide Truecaller with gross proceeds (before deduction of costs related to the Offering) of approximately SEK 1 billion. Truecaller intends to use the net proceeds from the Offering to position the Company for future growth, for general corporate purposes and to provide strategic flexibility for opportunistic acquisitions.

The Company, the Founders, the members of the Board, the executive management team, Sequoia Capital India and certain other shareholders, have for the benefit of the Joint Global Coordinators, with certain exceptions, agreed on certain lock-up undertakings for a period of up to 180 days after the first day of trading for the Company, Sequoia Capital India and certain other shareholders[1], and 360 days after the first day of trading for the Founders, the members of the Board and the executive management team, not to transfer or dispose of their respective shareholdings in Truecaller without prior written consent from the Joint Global Coordinators (so called lock-up period).

Full terms, conditions and instructions for an Offering will be included in a prospectus expected to be published by the Company in connection with the contemplated Offering and Listing. The prospectus will, if published, be available on the Company’s website at corporate.truecaller.com.

About Truecaller

Truecaller is the leading global platform for verifying contacts and blocking unwanted calls and messages.[2] Truecaller is on a mission to build trust in communication and has become an essential part of everyday communication. Truecaller enables safe and relevant conversations between people and makes it efficient for businesses to connect with consumers. The Company reached 278 million monthly active users ("MAUs") worldwide in over 175 countries during the second quarter of 2021[3], making Truecaller one of the ten largest communications platforms globally and the third largest in India by MAUs. Since launch, the Truecaller app has been downloaded half a billion times and has identified and blocked 30 billion unwanted calls. High brand recognition and a position as the third largest communication platform in India drives demand for Truecaller’s mobile advertising platform, enabling brands to communicate directly with millions of users each day. Headquartered in Stockholm, since 2009, Truecaller is a co-founder led, entrepreneurial company, with a highly experienced management team.

Key strengths and competitive advantages

Truecaller's past performance and its ability to achieve its future strategic and financial goals is based on the following strengths, competitive advantages and opportunities:

• Truecaller has a viral business model with clear market leadership and a trusted brand in its core markets, with high level of user engagement and a loyal customer base

Truecaller’s vision is making tomorrow's communication smarter, safer and more efficient. All products and features that Truecaller builds revolve around strong use cases for its users. As of 31 March 2021, Truecaller had been downloaded approximately 581 million times, 97% of which were organic downloads (i.e. downloads not prompted by paid advertising). For every downloaded and registered user since 2014, approximately 1 in 2 is still a monthly active user. Approximately 79% of the Company’s 278 million monthly active users[4] become daily active users.

With a strong and loyal user base, Truecaller has established itself as a top 10 global communication platform. Additionally, Truecaller is the third most popular communication platform in India, where the Company had an average of 205 million monthly active users in the second quarter of 2021 (according to AppAnnie data and Company estimates), behind only Facebook and WhatsApp. In other emerging markets, AppAnnie ranked it the top communication app in South Africa and Egypt as of the first quarter of 2021, and in the top three in Indonesia, Israel, Malaysia and Nigeria.

• Proven scalable playbook that can extend into other under-penetrated markets, addressing a significant market opportunity presented by the rapid growth of smartphone connectivity in emerging markets

Smartphone connectivity in emerging markets has grown rapidly in recent years and further robust growth rates are projected in the years to come. According to third party sources[5], the number of smartphone users globally is expected to grow by approximately 700 million over the next four years, of which approximately 400 million will be in Truecaller's core markets. In addition, emerging markets tend to be "mobile first" markets, with the share of individuals with smartphones greatly exceeding the share of households with computers. For example, in India, according to the same third party sources, smartphone penetration is approximately 40% while only approximately 11% of households have computers. Truecaller is well positioned to benefit from the growth of these markets by replicating its success in India across other emerging markets.

• Truecaller has developed a unique data asset that effectively acts as a barrier to entry, providing it with a significant competitive advantage

Millions of users rely every day on Truecaller to accurately verify unknown contacts and block unwanted calls or messages. To provide the highest possible degree of accuracy, Truecaller has over time built an extensive database of around 5.7 billion unique phone identities. Truecaller’s business model benefits from data-driven network effects as its usefulness increases with the number of users. As more users use the app, data is collected which increases the app’s usefulness, in turn attracting and retaining more users.

• Truecaller has demonstrated outstanding growth and profitability, with a robust and diversified monetization model

Truecaller has exhibited strong top line growth, with its operating revenue growing to SEK 492 million in 2020, up from SEK 190 million in 2018, corresponding to a compound annual growth rate of 61% for the period. Operating revenue in the first half of 2021 reached SEK 425 million, an increase of 151% compared with the first half of 2020. The growth was driven by the inherent viral growth of the Company’s user base, steady improvements in the platform, and enhancements in the Company’s business model monetization. Truecaller's business model has also demonstrated significant scalability as the Company achieved an adjusted EBITDA margin of 34% in the first half of 2021, which is an increase of 45 percentage points compared to the Company’s adjusted EBITDA margin of -11% for the first half of 2020.

• Proven product innovation and development

Truecaller prides itself on developing products that will be loved and valued by its users. The Company has proven this as evidenced by Truecaller being rated at 4.5 stars (out of 5) on Google Play Store by millions of its users.[6]

Financial highlights

The following table sets forth selected key figures[7] of Truecaller:

	For the six months ended 30 June				For the year ended 31 December
	2021		2020		2020		2019	2018
Operating revenue, SEKm	425			170	492		299	190
Operating revenue growth[8], %	151%			n.a.	64%		57%	n.a.
Adjusted EBITDA[9], SEKm	144			-18	88		-86	-53
Adjusted EBITDA margin[10], %	34%			-11%	18%		-29%	-28%
Adjusted EBIT[11],[12], SEKm	136			-29	-31		-99	-64
Adjusted EBIT margin[13], %	32%			-17%	-6%		-33%	-34%
MAU[14], millions	274			224	238		198	165

Truecaller’s financial targets and dividend policy

Prior to the listing on Nasdaq Stockholm, Truecaller’s Board of Directors has adopted a set of financial targets linked to Truecaller’s growth strategy:

• The Company is targeting an average revenue growth of above 45% per year between 2021 and 2024
• The Company is targeting an EBITDA margin above 35% after 2024
• The Group expects the combination of revenue growth and EBITDA margin to exceed 70% between 2021 and 2024

Truecaller’s Board of Directors does not plan on proposing any dividends in the medium term.

Truecaller’s financial targets stated above constitute forward-looking information. The financial targets are based upon a number of estimates and assumptions relating to, among others, the development of Truecaller’s industry, business, result of operations and financial position, and are subject to risks and uncertainties. The executive management team’s key assumptions underpinning the financial targets set out above will be described further in the prospectus expected to be published by Truecaller.

About Sequoia Capital India

Sequoia helps daring founders build legendary companies, from idea to IPO and beyond. Sequoia India operates in Southeast Asia and India where we actively partner with founders from a wide range of companies, across categories, including BYJUs, Carousell, Druva, GoTo (GoJek and Tokopedia), OYO Rooms, Truecaller, Zilingo, Zomato and more.

We spur founders to push the boundaries of what’s possible. In partnering with Sequoia, startups benefit from 49 years of tribal knowledge and lessons learned working with companies like Airbnb, Alibaba, Apple, Dropbox, Google, LinkedIn and Stripe early on.

From the beginning, universities, endowments and other non-profits have been the backbone of our investor base, which means founders’ accomplishments make a meaningful difference. For more information on Sequoia’s work in India and SE Asia, visit sequoiacap.com/india

Advisors

Carnegie Investment Bank AB (publ), Goldman Sachs Bank Europe SE, JP Morgan AG and Citigroup Global Markets Europe AG are Joint Global Coordinators (jointly the ”Joint Global Coordinators”) and Joint Bookrunners. Numis Securities Limited and Skandinaviska Enskilda Banken AB (publ) are Joint Bookrunners. Baker & McKenzie Advokatbyrå is legal advisor to the Company. Linklaters Advokatbyrå AB is legal advisor to the Joint Global Coordinators and Joint Bookrunners.

For further information please contact:

Odd Bolin, CFO
Email: investors@truecaller.com

Annika Billberg, Head of IR & Communication
Tel: +46 702 679791
Email: annika.billberg@truecaller.com

The information was submitted for publication, through the agency of the contact persons set out above, at 07:20 CET on 15 September 2021.

 

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Forward-looking statements

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