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How Deel went from 0 to a $12B valuation in just 5 years

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Here’s what’s in store for you today:

  • Deep dive of Deel, $500M in ARR helping the world’s best companies hire the world’s best talent.

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Deel: $12B enabling the future of global work

In just five years, Deel has enabled over 25k companies, including Nike and Shopify, to scale their global operations and hiring.

The HR and Payroll giant is democratizing access to global-top jobs, processing over $10B in payments in over 150 countries, while also improving business efficiency and scale.

Deel has been one of the fastest-growing startups in history, reaching $500M ARR and a $12B valuation in the blink of an eye. And its founders, Alex Bouaziz and Shuo Wang, did it in Deel fashion, fully remote and not based in Silicon Valley.

Born from the vision of two truly global citizens, Deel was a pioneer in remote working. And are now building out their suite of HR products to enable the future of work.

This is the story of how Deel went from Zero to One. 🚀

Business model: How Deel makes money

Deel provides a whole suite of HR and payroll solutions.

From global hiring and payroll to compliance, employee relocation, and even mergers and acquisition onboarding. They do a lot. But their business can be split into three core units, or models:

  1. International contractor management 📑

  2. Employer of Record (EOR) hiring 👩‍💼

  3. Global payroll 🌍

1. International contractor management 📑

Deel’s first product to find PMF. Their independent contractor payments solution.

Deel allows you to hire, onboard, manage, and pay international contractors from over 150 countries compliantly. Helping you reduce compliance risks, keep up to date with global regulatory changes, ensure timely and flexible payments, and save dozens of HR admin hours.

Pricing for this starts at $49/m.

2. Employer of Record (EOR) hiring 👩‍💼

After becoming the leading international contractor management tool, Deel expanded. Adding its EOR product.

Essentially what this means is Deel opens legal entities in different countries and hires employees on your behalf.

So, similar to their first product, the difference being in the status of the hire. Their first solution was for contractors, this EOR product gives the hire full-time employee status - which comes with different legal requirements and benefits.

Deel provides secure EOR services in 120+ countries. With an all-in-one management platform for payroll, tax, and compliance solutions on top of it.

Their EOR solution helps you stay compliant on contracts, minimum wage, terminations, and any other relevant local laws - mitigating your risks of hiring globally. While also automating your manual HR work with their employee management platform.

Pricing for this starts at $599/m.

3. Global payroll 🌍

Their newest solution comes in the form of simplifying and consolidating international payroll.

These are for multinational companies (or companies that want Deel’s help in expanding internationally) that want Deel to help with compliance, tax, and automation for the complexities of a global payroll.

Pricing for this is only available at a custom quote rate. And it makes sense, this is typically for large enterprises.

Deel also has two other products that fit into all three of these categories, Deel HR which is free and enables product expansion for new users, and Deel Immigration, which helps visa sponsorships in 30+ countries.

Although Deel has a free tier, you can’t even open an account on your own. You need to book a demo call. They are a sales-led growth company.

So they do this for a few reasons:

  • Helps them qualify leads better.

  • Gives potential customers a friendly face to associate with Deel.

  • Easier to upsell customers on a call.

  • Helps users understand Deel and its potential use cases better.

Deel’s Growth

Deel’s growth has been meteoric.

I usually start with a little write-up into a company’s growth. But I just want you to look at this growth chart. Over just FIVE years.

Deel has been one of the fastest-growing startups in history. In just five years, they went from launch to $500M in ARR. That is just insane.

And it’s not just vanity metrics.

Deel has been profitable since September 2022. With ~85% gross margins.

As of today, Deel supports over 25k businesses globally in 150+ countries, including Nike, Shopify, Revolut, and BCG - with 500k+ workers onboarded, and over $10B processed in global payroll.

Along with this, Deel has grown to over 3,000 remote team members in 107 countries.

To enable this hyper-growth, Deel raised a total of $679M from March 2019 to May 2022. Their first investment was going through YC, raising an additional $3.9M upon completing the cohort. And a year later raised $14M.

Then in the space of 13 months, they raised their Series B, C, and D for a total of $611M - valuing the company at $5.5B. Seven months later, they raised an additional $50M, taking their valuation to $12B.

Deel’s growth has been crazy. And importantly - they’ve become profitable.

Key Success Factors (KSFs)

There have been plenty of key success factors in Deel scaling to $500M ARR. There has to be for a company of Deel’s success. Here are three that really stood out to me.

👟 1. Speed of execution: When I was researching Deel, one of his early investors said that Alex has this incredible sense of urgency about him. If something can be done today, it will be. I got that same feeling listening to Alex and also Shuo. Both of them are all-in on what they have defined as a core value for their company “Deel Speed”.

🤼 2. Value on team: To scale at the speed Deel has, you have to lean heavily on your team. Alex and Shuo did just that. Empowering their team to take full ownership of their work through an intimate hiring process, an emphasis on fit, complete trust, and leading by example.

🗺️ 3. Readied themselves for a growing need: Alex and Shuo found a problem that people deeply needed solving, and they believed this need was only going to get bigger. Boy were they right! And although they could’ve never anticipated a global pandemic, they did notice a trend and put their sails up, to ready themselves for any winds that came. And when the pandemic hit, they set off to sail.

👟 1. Speed of execution

Alex and Shuo do everything YC teaches. And they do it better than everyone else. They have this sense of inevitability to them. And their speed of execution, or “Deel Speed” is the epitome of this.

They don’t just believe in Deel Speed for product. But in everything - Customer support. Operations. Marketing. Everything at the business is about speed.

But not just speed. They believe in doing things really well, and really fast.

To put it in their own words, “We move fast and build to last.”

Both Alex and Shuo pinpoint it as the most important part of their culture and a massive driver of their success.

And I agree.

Want the best product? Build something as quick as possible and test it. Iterate it if there’s promise or if it bombs, move on.

That’s fine. Part of being quick to build also requires you to be quick to move on - it builds trust with investors, your board, your team, and most importantly, your customers.

Talking about customers, Deel Speed is crucial in customer support and success. The faster you can help your customers solve problems with your product, the happier they will be, and the less likely they will be to churn.

Speed = Customer loyalty.

Speed is the DNA of Deel.

All of this is why employees love Deel, or in some cases, hate it. The Deel culture is not for everyone and they know that. They want people who want to move fast. And they know that isn’t for everyone. But if you are up for it, they make sure Deel will be the ride of a lifetime - so how do they do this…

🤼 2. Value on team

In just five years, Deel had grown to over 3,000 employees. And amongst wave after wave of tech layoffs, has yet to be a part of it. So it’s not just over-hiring too quickly. The business has needed to hire everyone.

Alex really values the hiring process. He understands how crucial it is. Not just for who you hire, but for who they hire, and who that hire hires.

He also understands that hiring is so much more than a person's CV and big-name companies they have worked for. He wants to make sure that everyone who joins is bought in on the Deel mission and culture - they are prepared to work fast and hard, and they genuinely care about solving their customers' problems.

Alex was so obsessed with the hiring process that he interviewed just over the first 400 people hired in the company.

He also believed that this deep understanding and appreciation of the hiring process would make him a better CEO for a company providing HR and hiring solutions.

The only reason he stopped was because his team let him know that he was becoming the bottleneck to hiring.

This is another example of how Alex and Shuo value their team.

Although Alex wanted to be part of every hiring decision, he trusted his team when they came to him and believed that the process was being negatively affected (speed and scale-wise) by him still being in it. Even against his own beliefs.

This culture of trust is intentional. They believe in complete trust until proven otherwise. Not the other way around. But then to support this, they have very tight KPIs for employees. Essentially it is all yours to lose. This is why their remote culture thrives. They don’t rely on appearances of hard work, but rather outcomes.

To keep this culture of trust embedded in the business, Alex and Shuo share, with their team and their users, their plans and goals for the company, how they want to help, and even their numbers, such as their revenue.

Deel has built a massive team of superstars through a clear mission alignment, care for customers, and mutual trust between their leadership, their team, and their customers.

🗺️ 3. Readied themselves for a growing need

Some might say (and have said) that Deel was lucky that Covid happened.

And on face value, it might seem like that. In fact, a lot of people who know of Deel probably think of it as a business born out of Covid. But that’s not the case.

Deel was founded in 2019. Before the pandemic.

Alex and Shuo not only identified that there was this need in the market, both from an employee and employer perspective, but also that it was growing. Big tech companies were already starting to adopt hybrid working models.

Seeing her friends at LinkedIn at Google only go into the office 2 or 3 days a week had Shuo believing that fully remote work was possible and that big companies were heading towards it. On top of this, when they were at the office, her friends said they barely knew anyone, and if they did speak to them, it was through Slack.

So why were people not hiring the best talent possible from around the world and allowing them to work remotely?

One major reason was that it was hard.

Before Deel, hiring an international contractor compliantly and making sure it was documented correctly was challenging. On top of that, payments were even more complicated because of foreign exchanges and delays.

Alex had seen the same problem, but from a different perspective.

Having lived in multiple countries, he saw firsthand how his friends from different countries had different opportunities and outcomes. Solely because of where they were born.

A lot of his friends couldn’t get high-paying jobs because of visa issues and local labor laws. So Alex wanted to eliminate border barriers to work opportunities.

So before COVID shut down the world, Alex and Shuo had both identified this as a massive problem to be solved.

But still, some would say it’s luck. And to some degree they are right. The pandemic obviously accelerated Deel’s business - from the perspective of companies adopting remote hiring sooner.

But is that pure luck?

I’ve discussed before the concept of generated vs blind luck. It’s actually very hard to think of something that is pure blind luck - find money on the floor? Well no, you could probably increase your odds of that happening by walking in different neighborhoods.

It’s a simple example, but it gets the point across. There are almost infinite ways to increase the chance of luck happening to you. In Deel’s case, that was identifying a need that was growing and building a solution for it.

I recently heard Scott Galloway on My First Million talk about this concept of having your sails ready and open. I think it’s a beautiful way to put it.

We can’t control what happens to us in life. But we can control how we respond, and having their sails ready to take advantage of an opportunity is exactly what Deel did.

So when thinking about your business, are you prepared for a massive gust of wind?

Because it can either set you sailing faster than ever or sink your ship.

Actions you can take to replicate Deel’s success

Eat your own dogfood 🐶

Before you start munching on one of Scooby’s tasty treats. I don’t mean that kind of dog food. I’m talking about using your own product.

It’s super helpful for a few reasons:

  1. Understand your customers better: Using your own product helps you relate to your customers. Understanding their needs and the best way your product can solve them.

  2. Find new product ideas: Realize your product doesn’t quite solve all your needs? Well, this is a perfect way to spot a new feature or integration. Your customers probably feel the same way as you.

  3. Spot bugs and frustrations quickly: You want to start working on bugs as soon as possible. Using your product frequently, allows you to spot bugs and potential areas that are frustrating your users sooner.

  4. Build trust with your customers: If you believe in your product enough to use it, your customers will feel like they can too.

Deel is a great example of a company that eats its own dog food.

They are a fully remote company so naturally their product is a perfect fit for them. And so they’ve used it since the beginning and through its expansion into different business models.

By doing this, Deel has been able to build a better product that truly and effectively solves their users’ needs.

Be involved in everything for as long as possible 🦸

One of the most impressive things to me about the founders of Deel is how involved they have been for so long.

As I mentioned before, Alex was involved in the hiring process for the first 400+ employees.

But this wasn’t it.

Both Alex and Shuo, along with much of their team, are heavily involved in customer support. In fact Alex has even asked people to DM him with feedback and questions about Deel.

I’ve also heard stories of him being super active in different group chats, including the YC alum group (which includes over 100 of his customers) - answering any comments, questions, or support in needs in 5 minutes or less.

Not only quick, he’s also detailed when he gives help.

Both him and Shuo have been involved in customer support tickets, helping wherever they can and deepening their understanding of their users.

They both understand that no amount of advertising or other growth hacks can help you as much as regularly talking with your customers.

Doing this builds superfans! No matter your size.

So see how you can stay involved in the core aspects of your business as long as possible - customer, product, people.

By doing this, you’ll stay closer to the problem you’re solving, your users, and your team.

Allowing you to not only build trust with your team and customers, but also to make better decisions.

One of the hardest parts about creating a new product is getting people to adopt it into their daily routines.

Especially when you are moving upmarket into big enterprises.

People have their ways of doing things and they want to stick to them. Their employers also don’t want time to be lost adjusting to and learning a new software - unless it's necessary.

One way to make this adoption process easier is to integrate your product with commonly used tools that make sense for your product.

For Deel that meant accounting software, people management platforms, communication tools, and project management trackers to name a few examples.

Their core strategy is to be able to enter either through an individual solution that integrates into other products and then from here, slowly expand their solutions within a company.

Having integrated solutions is helpful not only to sell one product now, but also to open the door to more in the future.

Educate people on the problem you are solving 🧑‍🏫

Although they are a heavily sales-led growth company, Deel are excellent at creating organic content that educates potential users and passively makes them aware of the solutions Deel offers.

They have a massive selection of articles and resources, from broad topics like “How to hire international employees”, to more niche ones like their “Quickstart guide to hiring in South Africa”.

By doing this, Deel demonstrates their expertise in the industry, while addressing the needs, pain points, and frustrations of their target audience.

So think about how you can serve your potential customers before they even sign up for your product or service. Deel does this by educating their audience through blog posts on real problems their target audience faces.

Creating practical and valuable content will help you build up your SEO, drive organic traffic, and importantly, it will help you build massive trust and credibility.

Potential customers will see you as an expert in solving their problems.

Bonus quick tip: Create a WhatsApp group with your customers 🦜

Want a quick way to get feedback from your customers and build brand evangelists?

Create a WhatsApp group with 50 of your most engaged users and speak to them daily.

  • Ask what features they want.

  • Ask them about key product decisions.

  • Ask them to send you messages when they find bugs.

  • Bring them along on your journey. They should be a part of it.

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