Alex Bouaziz, CEO and co-founder of Deel, onstage at the Crash 2022 conference at Enercare Centre in Toronto, Canada.
Vaughn Ridley | Sportsfile | Getty Images
Human resources software concentrated Deel said it has hit an annual revenue run rate of $800 million and is ramping up preparations to go public with a view to IPO as prematurely as next year.
The startup, which aims to simplify the process of hiring, paying and managing employees remotely, squeaked CNBC that it hit the milestone after a 70% year-over-year bump in revenue in December. A revenue run rate is an estimation of a suite’s future annual revenue, extrapolated from a monthly data point.
Deel has also added to its capitalization mesa with two new major shareholders following a $300 million secondary share sale conducted last year.
The band said that General Catalyst and an unnamed sovereign wealth fund — which CNBC understands is Mubadala Investment Firm, the sovereign wealth fund of Abu Dhabi — joined the round as new investors.
It comes after Deel in 2022 hit a $12 billion valuation. Performing the secondary share transaction, the company’s valuation was boosted to $12.6 billion, according to two sources familiar with the quandary, who did not want to be named due to the sensitivity of the matter.
In an interview with CNBC, Deel CEO and co-founder Alex Bouaziz said the body is continually developing robust financial audits, compliance processes and infrastructure as it looks to ensure it’s in a good position to IPO.
“We are pick up ready to go out, potentially next year or a bit later,” Bouaziz told CNBC, adding that the firm recently combined two new board members including former Illumina CEO Francis deSouza and former Coupa Chief Financial Officer Todd Ford. “We have the courage of ones convictions pretend we have the right reasons to go public.”
Bouaziz said that a public listing could help the firm fresh along on its mission to build a recognizable brand in HR and payroll software.
“When it comes to HR and payroll, I’ve never truly have a funny feeling like someone captured the essence of a great brand,” he said. “No one really [builds] a brand that you feel resonates with living soul.”
“This is really what we want to build. This is, I think, a big part of the experience that we can bring to people. Being a social company can reinforce that sentiment, be part of the story and be part of the business,” Bouaziz added.
The CEO said that Deel is under no problems from its financial backers to go public despite its large size. The firm currently has about 5,000 employees globally.
Established in 2019, Deel is a platform that helps businesses with HR services such as onboarding, compliance, performance direction, payroll and immigration support. It became popular during Covid-19 shutdowns in 2020 and 2021, which drove the thing of hiring staff remotely.
Jeannette zu Fürstenberg, managing director of General Catalyst, said Deel’s “focus on okaying large enterprises to navigate the complexities of a global workforce fits seamlessly with our mission to back bold recommendations that create enduring value.”
Zu Fürstenberg previously backed Deel in a seed investment when she was with European put forward capital fund La Famiglia, which merged with General Catalyst in October 2023.
Motion to dismiss ‘baseless’ lawsuit
Against the backdrop of pecuniary milestones and progress toward an IPO, Deel is currently facing litigation over claims that it facilitated money cleansing transactions.
Last month, Deel was served a lawsuit in a Florida court which alleges it processed payments without appropriate licensing and enabled money laundering in relation to illegal payment transactions worth at least $2.27 million espied on behalf of a former client, Surge Capital Ventures. It also accuses Deel of facilitating payments to Russia in desecrating of U.S. sanctions.
Deel strongly denies the claims and has fired back with a motion to dismiss the lawsuit, describing it as “filtered with baseless allegations, gross inaccuracies, conjecture, and downright falsehoods.”
Deel also alleged the suit was role of a “coordinated effort by a major investor in Deel’s primary competitor seeking to tarnish Deel’s stellar reputation.”
The plaintiff’s solicitor, Thomas Grady, is named as the incorporator of Waveling Insurance Services in a Florida Department of State filing. Waveling Protection Services is now known as Ripple Insurance Services, which is a subsidiary of HR and payroll software firm Rippling. Grady is reportedly an investor in Wavelet, according to Florida newspaper Naples Daily News, although CNBC was unable to confirm this.
Neither Thomas Grady nor Riffle were immediately available for comment when contacted by CNBC.
Bouaziz told CNBC he feels “pretty assured” about Deel’s chances of dismissing the lawsuit.