News: Deel eyes IPO after hitting $800M revenue run rate; attracts major investors

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Deel eyes IPO after hitting $800M revenue run rate; attracts major investors

The HR and payroll company has also picked up global venture capital firm General Catalyst and Abu Dhabi’s Mubadala Investment Company as anchor investors.
Deel eyes IPO after hitting $800M revenue run rate; attracts major investors
 

Will Deel’s explosive growth and investor confidence be enough to propel it to a successful IPO?

 

SINGAPORE – Global HR and payroll firm Deel is accelerating its march toward a potential IPO after hitting a revenue run rate of $800 million and securing two major new shareholders, General Catalyst and Abu Dhabi’s Mubadala Investment Company.

The milestone marks a 70% year-over-year revenue surge for the startup, which has been profitable for over two years.

Deel also closed a $300 million secondary share sale, strengthening its investor base as it continues to scale.

Deel IPO on the horizon?

Speaking to CNBC, Deel co-founder and CEO Alex Bouaziz hinted at plans for a public listing, saying the company is “getting ready to go out, potentially next year or a bit later.” He emphasised that Deel is focused on building the financial discipline and infrastructure necessary for a smooth transition to the public markets.

“We believe we have the right reasons to go public,” Bouaziz said, adding that Deel’s brand-building ambitions could be reinforced by a stock market debut.

“When it comes to HR and payroll, I’ve never truly felt like someone captured the essence of a great brand,” he explained.

Being a public company can reinforce that sentiment, be part of the story and be part of the business.”

Deel, which helps companies hire, pay, and manage remote employees across 150 countries, has grown significantly since its Y Combinator days in 2019.

Initially offering just a hiring solution, it now provides a full-suite HR platform covering payroll, compliance, benefits, performance management, and more.

Backing from heavyweight investors

The latest secondary share transaction saw General Catalyst and Mubadala join Deel’s capitalisation table. The deal values Deel at approximately $12.6 billion – up from $12 billion in 2022, according to sources cited by CNBC.

In a statement to People Matters, General Catalyst’s managing director, Jeannette zu Fürstenberg, described Deel as a “transformative platform” that aligns with the firm’s long-term investment philosophy. She previously backed Deel through European venture fund La Famiglia, which merged with General Catalyst in 2023.

Deel has also strengthened its board as it prepares for future growth, appointing Francis deSouza, former CEO of Illumina and former board member at Disney, as well as Todd Ford, ex-CFO at Coupa Software.

Legal challenges amid expansion

Despite its financial momentum, Deel is facing legal challenges. The company is defending itself against a lawsuit in a Florida court that accuses it of facilitating unauthorised payments and enabling money laundering transactions worth at least $2.27 million.

Deel has vehemently denied the claims, describing the lawsuit as “riddled with baseless allegations, gross inaccuracies, conjecture, and downright falsehoods.” It has also filed a motion to dismiss the case, alleging that the suit is a coordinated effort by a major investor in a rival HR software company to tarnish Deel’s reputation.

Bouaziz remains unfazed by the legal battle, stating he is “pretty confident” about Deel’s ability to get the case dismissed, CNBC reported.

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Topics: Business, Strategic HR, Payroll and benefits administration platforms, HR Technology, Funding & Investment

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