Deel secures $300M secondary transaction at over $12B valuation, hits $800M revenue run rate
Deel secures $300M secondary transaction at over $12B valuation, hits $800M revenue run rate
With a major secondary transaction and strong revenue growth, Deel is positioning itself for a potential IPO.
Human resources unicorn Deel is gaining two new significant investors: the American venture capital firm General Catalyst and the sovereign wealth fund of Abu Dhabi, Mubadala. The two purchased Deel shares for $300 million as part of a secondary transaction. In such transactions, shares are sold by early-stage investors, company founders, and sometimes employees or former employees. In this case, the shares belong to early investors in the company, and the money did not go into its coffers. The secondary transaction was done at a valuation of about $12 billion, similar to the company's last fundraising round in 2022.
Deel’s last fundraising round in 2022 raised some eyebrows due to its modest size of $50 million, but it was conducted at a valuation of $12 billion, compared to a $5.5 billion valuation just six months earlier. That round was led by a strategic investor, the Emerson Fund, founded by the widow of Apple founder Steve Jobs. To date, Deel has raised approximately $680 million, not including the current secondary.
Last year, two new independent board members joined Deel as it prepares for its future: Francis deSouza, former CEO of Illumina and former board member of the Walt Disney Corporation, and Todd Ford, veteran board member and joint President and CFO at Coupa Software.
In parallel with the announcement of the secondary transaction, Deel reported that it reached an annual revenue rate of $800 million in 2024, reflecting 70% growth compared to 2023. The company also stated that it has been profitable for the second consecutive year. With this revenue jump, it is speculated that Deel is preparing for an initial public offering (IPO) on Wall Street next year.
Founded by Alex Bouaziz and his father Philippe Bouaziz in 2019, Deel was part of the Y Combinator accelerator, an American startup incubator that has produced well-known companies like Airbnb, Stripe, and DoorDash. Deel’s platform enables global workforce management for businesses of all sizes. The platform currently operates in 150 countries and employs 5,000 people. Alex Bouaziz serves as CEO, Philippe Bouaziz as CFO, and another founder, Shua Wang, serves as Chief Revenue Officer (CRO).
What may complicate Deel’s IPO plans is its involvement in a money laundering scandal linked to online platforms. Last January, a lawsuit was filed against the company in Florida, alleging that it handled payment transfers without the appropriate licenses and facilitated the laundering of $2.27 million. The lawsuit also claims that Deel processed payments to Russia, violating US sanctions. The company denies all allegations.
