Deel, a leading HR startup, has made a significant move by acquiring PaySpace, a payroll and HR software company based in Africa. This acquisition, which is the largest to date for Deel, comes shortly after the company’s acquisition of Zavvy, an AI-based “people development” startup in Munich. The financial terms of the PaySpace acquisition have not been disclosed.
Key Takeaway
Deel’s acquisition of PaySpace and its milestone of crossing $500 million in ARR demonstrate the company’s strategic growth and expansion efforts, particularly in the African market.
Expanding Footprint in Africa
PaySpace, headquartered in Johannesburg, serves over 14,000 customers across 44 countries in Europe, Latin America, the Middle East, and Africa. The company’s client base includes well-known multinationals such as Heineken, Coca-Cola Beverages, and Puma Sports SA. With this acquisition, Deel, a $12 billion HR startup operating in over 70 countries, aims to strengthen its presence in Africa.
PaySpace: A Bootstrapping Success Story
Founded in 2007 by the Clark brothers, along with George Karageorgiades, PaySpace started as a cloud-based payroll and HR platform. Despite not being a typical venture-backed startup, PaySpace has experienced significant growth, expanding its product reach to 43 countries by 2022. The company’s sales have been growing by over 30% annually, reflecting its success in the industry.
Deel’s Milestone: Crossing $500M in ARR
Deel also announced that it has achieved a significant milestone by crossing $500 million in annual recurring revenue (ARR) organically, outside of the PaySpace acquisition. This marks a substantial increase from $290 million in ARR at the end of 2022. The company also revealed that it has been EBITDA positive since September 2022 and still has $600 million in reserves.
