[Global] Deel acquires PaySpace and crosses $500m in ARR

On March 5, HR startup Deel announced its acquisition of African-based payroll and HR software and services company PaySpace in a deal that represents its largest acquisition to date, Yahoo reports.

News of the deal comes less than a week after Deel announced it had acquired Munich-based Zavvy, an AI-based “people development” startup building tools for personalised career progression, training and performance management.

Financial terms of the PaySpace acquisition have yet to be disclosed.

More than 14,000 customers reportedly use the software and services of Africa-based PaySpace in 44 countries across Europe, Latin America, the Middle East and Africa. Customers include multinationals across various industries such as Heineken, Coca-Cola Beverages and Puma Sports SA. 

For $12 billion HR startup Deel - a firm facilitating talent hiring, payment, and management in over 70 countries - the acquisition is an opportunity to strengthen its footprint in Africa.

Brothers Bruce, Clyde and Warren Clark - together with George Karageorgiades - founded PaySpace in 2007 as a cloud-based payroll and human resources platform intended to streamline the laborious payroll runs and backup procedures associated with traditional payroll and HR software. Within three years, PaySpace expanded its product reach to 11 countries and by 2022 this footprint had reportedly extended to 43 countries. 

On March 5, Deel separately revealed it had crossed $500 million in annual recurring revenue (ARR), organically, outside of the PaySpace acquisition; rising from $290 million in ARR at the end of 2022. 

PaySpace reportedly built 45 engines over the past 15 years, according to CEO and co-founder Alex Bouaziz. Adding that Deel’s four-year ambition is to serve 100 countries with native payroll engines.

“We were their customer, running payroll in 10 countries using PaySpace,” Mr Bouaziz said. “Our internal team was dying to acquire them and have the ability to do on-the-spot calculations. Theirs is one of the best technologies we’ve ever seen . . . We had to do a lot of convincing.”

In a written statement, Clyde van Wyk - PaySpace director - said, “Like PaySpace, Deel strives to evolve its offering through disruption. We set out to modernize the payroll industry, which was burdened by manual processes and stringent legislative and compliance requirements, much like Deel revolutionized global hiring.”

Deel now reportedly owns more than 150 entities globally and manages in-house, in-country payroll teams in over 70 countries, in addition to offering employer of record, contractor, immigration, HRIS, and performance management services.

“One of the key things when you run payroll typically the way we have is in working with local software engine and tax calculations, you have to be integrated with the best payroll software,” Mr Bouaziz said. “But there’s nothing like owning your own technology. We went from two engines to five engines, and now to more than 50 with the acquisition of PaySpace.”

Source: Yahoo

(Link and quotes via original reporting)

On March 5, HR startup Deel announced its acquisition of African-based payroll and HR software and services company PaySpace in a deal that represents its largest acquisition to date, Yahoo reports.

News of the deal comes less than a week after Deel announced it had acquired Munich-based Zavvy, an AI-based “people development” startup building tools for personalised career progression, training and performance management.

Financial terms of the PaySpace acquisition have yet to be disclosed.

More than 14,000 customers reportedly use the software and services of Africa-based PaySpace in 44 countries across Europe, Latin America, the Middle East and Africa. Customers include multinationals across various industries such as Heineken, Coca-Cola Beverages and Puma Sports SA. 

For $12 billion HR startup Deel - a firm facilitating talent hiring, payment, and management in over 70 countries - the acquisition is an opportunity to strengthen its footprint in Africa.

Brothers Bruce, Clyde and Warren Clark - together with George Karageorgiades - founded PaySpace in 2007 as a cloud-based payroll and human resources platform intended to streamline the laborious payroll runs and backup procedures associated with traditional payroll and HR software. Within three years, PaySpace expanded its product reach to 11 countries and by 2022 this footprint had reportedly extended to 43 countries. 

On March 5, Deel separately revealed it had crossed $500 million in annual recurring revenue (ARR), organically, outside of the PaySpace acquisition; rising from $290 million in ARR at the end of 2022. 

PaySpace reportedly built 45 engines over the past 15 years, according to CEO and co-founder Alex Bouaziz. Adding that Deel’s four-year ambition is to serve 100 countries with native payroll engines.

“We were their customer, running payroll in 10 countries using PaySpace,” Mr Bouaziz said. “Our internal team was dying to acquire them and have the ability to do on-the-spot calculations. Theirs is one of the best technologies we’ve ever seen . . . We had to do a lot of convincing.”

In a written statement, Clyde van Wyk - PaySpace director - said, “Like PaySpace, Deel strives to evolve its offering through disruption. We set out to modernize the payroll industry, which was burdened by manual processes and stringent legislative and compliance requirements, much like Deel revolutionized global hiring.”

Deel now reportedly owns more than 150 entities globally and manages in-house, in-country payroll teams in over 70 countries, in addition to offering employer of record, contractor, immigration, HRIS, and performance management services.

“One of the key things when you run payroll typically the way we have is in working with local software engine and tax calculations, you have to be integrated with the best payroll software,” Mr Bouaziz said. “But there’s nothing like owning your own technology. We went from two engines to five engines, and now to more than 50 with the acquisition of PaySpace.”

Source: Yahoo

(Link and quotes via original reporting)