Remote working has become the norm for many of us not on the front lines, and what's been notable is that this is also changing the mindset for a lot of organizations, which are now hiring from an increasingly global talent pool. Today, a startup called Deel
— which provides payroll, compliance tools and other services to help businesses do that in a more seamless way — is announcing $30 million in new funding to double down on the opportunity.
"We want to give access to services that remote workforces have typically not had access to," said Alex Bouaziz,
the CEO who co-founded the company with Shuo Wang
(the CRO). "We want to be the platform for employees and contractors who are working abroad. We went to give them all the same level of care as employees working in the main office."
The Series B is being led by Spark Capital
and comes closely on the heels of Deel
raising $14 million in a Series A only a few months ago
led by Andreessen Horowitz. Deel is an alum of Y Combinator and counts the incubator, along with Nat Friedman, Ryan Petersen, John Zimmer, William Hockey and Alexis Ohanian, among its other investors.
Deel has now raised some $48 million to date, and while Bouaziz said that the startup is not disclosing valuation, he did confirm that the number has grown three-fold since May.
That may sound like a very rapid (too rapid?) progression, but it speaks to the company's momentum. Deel is now being used by more than 500 companies (adding over 100 since May) and covering thousands of employees across 140+ countries. And it also underscores the specific market area in which Deel is working and the demand for what it offers.
In the words of Spark's general partner Yasmin Razavi, who led the investment for the firm after proactively reaching out to Bouaziz over Twitter to get acquainted, all of the buzz these days is about workforce productivity tools and cloud services to manage data securely and efficiently among newly distributed workers, but Deel is helping fix something even more fundamental to keep from putting the cart before the horse, so to speak, when it comes to employing people across borders, whether they are employees or contractors.
"Everyone keeps talking about tools like Slack, Notion and Zoom as enablers," she said, "but the reality is that if you can't hire and pay people, there is no workforce."
The problem that Deel is solving is the fact that up to now it's not been very easy to do this. Companies either have to set up or already have in place local entities, or work with local legal teams to get things right. Chances are that if you are scaling quickly, you may not have these in place already, and might not have the funds to set it up if you don't. That, in turn, might keep an organization from making the leap to working with the person abroad, or at least limiting the scope of engagement between the worker and company as a result.
(Deel is priced
on a per-seat basis starting at $35 per person per month, but that varies by volume, services used and whether the person is a contractor or employee, and so on.)
Deel today already provides various tools to employees and the organizations that they work for, such as payroll services, tax compliance information, assistance on building contracts, invoicing services and a range of insurance options covering health and other areas related to working life.
The range of services currently includes lots of localised options: the contract tools, for example, help organizations build contracts that comply with local labor laws; the payroll offers different options localised for the best way to pay people in specific markets; and Deel provides comparative scenarios for employers to figure out if it's best to keep people on contracts or take them on full time.
Now the plan is to continue building out that stack with more services aimed at both the workers and their employers. That includes loans based on salary for workers, more insurance and benefits options and so on. Interestingly, the fact that Deel offers so many integrated services that include recurring payments means that its life cycle with customers (and within the bigger two-sided marketplace, with employees) extends beyond simply just onboarding workers.
Razavi, Bouaziz and Wang are themselves the products of the rapid workforce globalisation that Deel has identified and builds products to support. The two co-founders met as students at MIT, but Wang comes from China, and Bouaziz is from Paris with family also in Israel, while Razavi herself is from Canada.
All effectively converged in what had become the de facto center of the tech universe, San Francisco — but these days they are not at all in the same places. Razavi spoke to me from Toronto, where she was quarantining before returning to the U.S. after a necessary trip to Portugal. Bouaziz spoke to me from Israel, where he went to see his family at the very start of the pandemic and has remained ever since. Wang is still in San Francisco for the moment.
It's anyone's guess where the three will be a year from now, and the point of Deel is that the company's tools remove that variable from the equation. If things continue the way they have for the last eight months, that variable — where are you working from? — is going to be an increasingly common one, but with the help of a service like Deel's, not a deal-breaker when it comes to getting a job or hiring the right person for a role.
There are a number of other companies out there that are disrupting the very incumbent world of payroll services, including the likes of Gusto and Rippling. The interesting thing with Deel is how it has focused squarely on the opportunity of providing services for people who are working across national borders. If that does become more commonplace, it's likely to see significantly more competition, but for now, it's a huge opportunity that's only just opening up. Published by TechCrunch - on September 9, 2020