Deel, a prominent HR platform founded in 2019, is preparing for a potential initial public offering (IPO) as early as next year following a significant leap in its revenue. Known for aiding businesses with HR services such as onboarding, compliance, performance management, payroll, and immigration support, Deel has become a vital tool for companies adopting remote work strategies. The company gained popularity during the Covid-19 shutdowns, when remote hiring became a necessity for many organizations.
Deel is esteemed at an impressive $12 billion valuation and employs approximately 5,000 people worldwide. The company recently bolstered its financial standing by adding General Catalyst and Abu Dhabi's sovereign wealth fund Mubadala to its capitalization table. This addition came through a substantial $300 million secondary share sale, elevating Deel's valuation to $12.6 billion.
"We are getting ready to go out, potentially next year or a bit later," stated Deel CEO Alex Bouaziz.
The company reported an annual revenue run rate of $800 million, signifying robust financial health and readiness for the IPO journey. Deel's mission is to simplify the process of hiring, paying, and managing employees remotely, aiming to establish a recognizable brand within the HR and payroll software sector.
"We believe we have the right reasons to go public," Bouaziz affirmed.
However, Deel faces legal challenges that could impact its IPO aspirations. A lawsuit in a Florida court accuses the company of processing payments without proper licensing and enabling money laundering related to illegal payment transactions worth at least $2.27 million. Additionally, the lawsuit claims that Deel facilitated payments to Russia in violation of U.S. sanctions.
Despite these allegations, CEO Alex Bouaziz exudes confidence in overcoming the legal hurdles.
"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," Bouaziz emphasized.
In preparation for its IPO, Deel is enhancing its financial audits, compliance processes, and infrastructure to ensure compliance and readiness for public scrutiny. The company remains focused on its growth trajectory and expansion plans.
"When it comes to HR and payroll, I've never truly felt like someone captured the essence of a great brand," Bouaziz remarked. "No one really [builds] a brand that you feel resonates with people."
Deel's ability to navigate both its financial growth and legal challenges will determine its success in going public. The company's leadership remains optimistic about its future prospects and the potential benefits of becoming a publicly traded entity.
Leave a Reply