Deel, a human resources software startup, has achieved an annual revenue run rate of $800 million and is gearing up for a potential initial public offering (IPO) in the near future. The company also secured new investors, General Catalyst and Abu Dhabi's sovereign wealth fund, Mubadala, through a $300 million secondary share sale.
Human resources software startup Deel has achieved an annual revenue run rate of $800 million, according to a statement to CNBC. The company also announced the addition of two prominent new shareholders, General Catalyst and Abu Dhabi's sovereign wealth fund, Mubadala , as part of a $300 million secondary share sale. Deel CEO Alex Bouaziz indicated to CNBC that the company is preparing for a potential initial public offering ( IPO ) in the coming year or slightly later.
Deel, which aims to simplify the process of hiring, paying, and managing remote employees, reported a 70% year-over-year revenue surge in December, leading to the $800 million run rate milestone. The company has also bolstered its financial standing through a $300 million secondary share sale last year. General Catalyst and an unnamed sovereign wealth fund, understood to be Mubadala Investment Company, joined the round as new investors. Following this secondary share transaction, Deel's valuation has increased to $12.6 billion, according to two anonymous sources familiar with the matter.In an interview with CNBC, Deel CEO and co-founder Alex Bouaziz expressed the company's readiness for an IPO, highlighting the robust financial audits, compliance processes, and infrastructure being developed to ensure a smooth listing. Bouaziz stated, 'We are getting ready to go out, potentially next year or a bit later,' adding that the firm recently appointed two new board members, including former Illumina CEO Francis deSouza and former Coupa Chief Financial Officer Todd Ford. 'We believe we have the right reasons to go public,' said Bouaziz, noting that a public listing could contribute to building a recognizable brand in the HR and payroll software sector. He commented, 'When it comes to HR and payroll, I've never truly felt like someone captured the essence of a great brand. No one really built a brand that you feel resonates with people.' '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 public company can reinforce that sentiment, be part of the story and be part of the business,' he added. Bouaziz assured that despite its substantial size, with approximately 5,000 employees globally, Deel is not facing pressure from its financial backers to go public. Founded in 2019, Deel provides businesses with HR services encompassing onboarding, compliance, performance management, payroll, and immigration support. It gained popularity during the COVID-19 lockdowns in 2020 and 2021, as the trend of remote hiring accelerated. General Catalyst's managing director, Jeannette zu Fürstenberg, expressed her confidence in Deel's potential, stating, 'Deel's focus on enabling large enterprises to navigate the complexities of a global workforce fits seamlessly with our mission to back bold ideas that create enduring value.' Zu Fürstenberg had previously invested in Deel during its seed funding stage while at European venture capital firm La Famiglia, which merged with General Catalyst in October 2023.However, Deel is currently facing a legal challenge over allegations of facilitating money laundering transactions. Last month, the company was served with a lawsuit in a Florida court, which claims that Deel processed payments without proper licensing and enabled money laundering in connection with illegal payments totaling at least $2.27 million on behalf of a former client, Surge Capital Ventures. The lawsuit also accuses Deel of facilitating payments to Russia in violation of U.S. sanctions. Deel strongly refutes these claims and has filed a motion to dismiss the lawsuit, characterizing it as 'riddled with baseless allegations, gross inaccuracies, conjecture, and downright falsehoods.' Deel further alleges that the lawsuit is part of a 'coordinated effort by a major investor in Deel's primary competitor seeking to tarnish Deel's stellar reputation,' as stated in a Florida Department of State filing. It's worth noting that neither Thomas Grady nor Rippling were immediately available for comment when contacted by CNBC.
Deel IPO Human Resources Software Revenue Mubadala General Catalyst Remote Hiring Money Laundering Lawsuit
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