Payroll startup Deel raises funds at US$1.25b valuation

[SAN FRANCISCO] Deel, a startup that helps companies comply with local hiring laws around the world, is raising funds valuing it at US$1.25 billion.

The San Francisco-based startup said its valuation rose from US$225 million last year.

The YC Continuity Fund, along with existing investors Andreessen Horowitz and Spark Capital, led the US$156 million round, according to a statement provided to Bloomberg News. Ali Rowghani, managing director of YC Continuity, is joining Deel's board.

"The way work is done inside companies is changing," Mr Rowghani said, and businesses are "moving toward a border-less form of collaboration." The company, which started in 2018 and has roots in Israel, has now raised US$206 million in less than a year. Deel's software helps companies manage functions such as payroll for contractors and full-time employees in different countries.

"People realise that talent is everywhere," Deel co-founder and chief executive officer Alex Bouaziz said in an interview. With Deel, you can "sign a contract and have someone on board in the same day," he said.

Venture capital funds have been pouring money into firms that help human resources departments manage remote workforces. In the past few weeks, startups including Degreed and Lattice became unicorns, attaining valuations of more than US$1 billion.

Yasmin Razavi, a general partner at Spark, said she doesn't see the popularity of remote work decreasing after the coronavirus pandemic wanes. Deel's own workforce is entirely remote.

"The toothpaste is out of the tube on this one," Ms Razavi said. "This is real, this is going to stay." Investors in the funding round also included Uber Technologies Inc. CEO Dara Khosrowshahi and Hollywood producer Jeffrey Katzenberg, among others, according to the statement.

BLOOMBERG