HR platform celebrates its 100% revenue growth by shopping for other businesses

Deel, the all-in-one HR platform for global teams, has been going quite global itself, as it just announced its plans to acquire PaySpace, the South African cloud-based payroll and human resources company. This would make Deel’s largest acquisition to date. 

The price of the PaySpace deal remained undisclosed. This move follows closely on the heels of Deel’s recent announcement of acquiring Zavvy, a Munich-based startup specializing in AI-driven “people development” tools tailored for personalized career advancement, training, and performance monitoring.

PaySpace, headquartered in South Africa, serves more than 14,000 customers in 44 countries across Europe, Latin America, the Middle East, and Africa. Its clients include big companies like Heineken, Coca-Cola Beverages, and Puma Sports SA. Deel, a HR startup valued at $12 billion, operates in over 70 countries, providing services for talent recruitment, payment, and management. Acquiring PaySpace presents Deel with a chance to expand its presence in the African continent.

While last year PaySpace already received funding from Netcash, a company that specializes in payment solutions like debit orders and salary payments, PaySpace isn’t your typical venture-backed startup; it’s more of a self-sustaining success story, having largely financed itself from the beginning.

In 2007, Bruce, Clyde, and Warren Clark, along with George Karageorgiades, started PaySpace. Their aim was to create a cloud-based payroll and human resources platform. Their goal was to simplify the time-consuming payroll processes and backups that were common with traditional payroll and HR software back then. In just three years after starting, PaySpace was available in 11 countries. By 2022, it had reached 43 countries. The company’s executives then revealed plans to enter Brazil and the UK PaySpace, now 20 years old, serves a wide range of clients, from small businesses to large enterprises, and its sales have been growing by over 30% each year, as stated by managing director Sandra Crous in a recent interview with Financial Minds.

Deel announced on Tuesday that it reached over $500 million in annual recurring revenue (ARR) on its own, without counting this acquisition. This is an increase from $290 million in ARR at the end of 2022. Deel also mentioned that it has been making a profit in earnings before interest, taxes, depreciation, and amortization (EBITDA) since September 2022 and still has $600 million in cash reserves. Although plans for an initial public offering (IPO) are not immediate, Deel’s CEO and co-founder, Alex Bouaziz, suggests it could happen around 2025 or 2026.