Deel, a San Francisco-based payroll and HR company has announced the acquisition of African company PaySpace. While the amount remains undisclosed, it is estimated to be around $100 million, making it one of Deel’s largest acquisitions to date. This acquisition comes close on the heels of Deel’s acquisition of German-based people development platform Zavvy for $20 million.
Alongside this acquisition, Deel announced that it has achieved $500M in annual recurring revenue (ARR) within five years of founding. It positions the company as a market leader in global payroll, deepening its native infrastructure and coverage.
Deel revealed in January 2023 that it hit $295 million in ARR at a $12 billion valuation, up from $57 million ARR a year earlier. Here are more details on how Deel’s acquisition of PaySpace will help it grow further.
Why PaySpace?
Johannesburg-based PaySpace was founded by brothers Bruce, Clyde and Warren Clark, along with George Karageorgiades in 2007. The platform streamlines the labourious payroll processes and backup procedures.
It has over 14,000 customers using its software and services in 44 countries across Europe, Latin America, the Middle East and Africa. Some of its customers include multinationals, such as Heineken, Coca-Cola Beverages and Puma Sports SA. By acquiring this company, Deel can strengthen its footprint in Africa.
First-of-its kind payroll engine
By acquiring PaySpace, Deel, founded by Alex Bouaziz and Shuo Wang is said to become the first global payroll and Employer of Record (EOR) with its own localised full-stack payroll engine in 50 countries and integrated into its offering. Deel has the ability to be the system of record for HR organisations worldwide and can give its customers a simple and single interface to manage their global teams.
Apparently, there is greater efficiency and control for companies, faster payroll cycles, more localised compliance insights relevant to their workforce, and the ability to make changes to their payroll at any time.
Deel co-founder and CEO Alex Bouaziz said, “Global payroll is hard to do and critical to get right. As a company, you want assurances you can pay your teams on time, compliantly, anywhere in the world. PaySpace’s single-platform payroll expertise and breadth of coverage, particularly in Africa and the Middle East, combined with PayGroup’s presence in APAC, will give Deel customers the reach they need to grow their businesses globally. Our long-term vision is to be the most comprehensive payroll system in the world.”
