Friday Funding: HR Platform Deel Valued at $12 Billion

By: James Flippin · January 26, 2023 · Reading Time: 3 minutes

Revenue Growth

Deel was co-founded by Alex Bouaziz and Shuo Wang in 2019 to provide tech-based human resources services. It boasts impressive numbers, especially given its status as a software startup during a time when many are struggling.

At the start of 2021, the company reported $4 million in annual recurring revenue. Per Bouaziz, that number has since risen to $295 million, as of January 1. Deel operates at 85% gross margins or higher and has turned a profit since September. Now, the startup is publicizing its latest funding round, which took place in the second quarter of 2022 and valued Deel at $12 billion.

A Change, Then COVID

At its launch, Deel focused on helping companies hire international workers and avoid local compliance issues. But Bouaziz says things kicked into high gear when the company pivoted to build a system that allows firms to hire international workers directly, rather than outsourcing the process.

This shift set Deel up for success when the pandemic hit, as companies were forced to build out a remote workforce and were willing to spend big to do so. Now, Deel is looking to expand by offering new software that can handle domestic payroll and other aspects of HR.

Lofty Ambitions

Bouaziz says he wants to make Deel into the “Apple (AAPL) of HR.” However, there’s no shortage of competition. Other HR startups, many with robust funding, are similarly expanding their services, including the likes of Rippling, Gusto, Brex, and Ramp.

As technology — and the US workforce as a whole — evolves across the board, HR is a ripe area for advancement. Job opportunities exist everywhere, and firms are increasingly willing to reach across the digital divide to fill positions.

Deel is reportedly aiming to double its revenue this year and achieve $1 billion over the next few years. They may well have picked the perfect arena to achieve this lofty goal.

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