Global payroll company Deel announced today that it is acquiring South Africa-based payroll and HR solution company PaySpace. No financial details were disclosed but sources close to the deal say that Deel is paying $100 million for PaySpace - one of Deel’s largest acquisitions to date.
PaySpace has over 20 years payroll technology experience, providing payroll engines and human resources services in 44 countries in Europe, Latin America, the Middle East and Africa for more than 14,000 customers. The company's size, expertise, and proprietary disruptive payroll technology give it unrivaled scale and reach. Customers include multinationals such as Heineken, Coca-Cola, and Puma.
By acquiring PaySpace, Deel becomes the first global payroll and Employer of Record (EOR) with its own full-stack payroll engine localized in 50 countries and integrated into its offering. Deel has the ability to be the system of record for HR organizations worldwide and can give its customers a simple and single interface to manage their global teams. All of this results in greater efficiency and control for companies, faster payroll cycles, more localized compliance insights relevant to their workforce, plus the ability to make changes to their payroll at any time.
The latest purchase follows Deel’s acquisition of leading APAC payroll provider PayGroup. Deel now owns the full HR stack- entities, local teams (legal, HR, payroll), and local payroll engines in six continents and it has a four-year goal to serve 100 countries with native payroll engines.
Deel was founded in 2018 by Israel-based CEO Alex Bouaziz, Shuo Wang who lives in the US and Ofer Simon, who is not part of the company. The initial expertise of Deel was helping customers employ and pay freelancers around the world. Subsequently Deel set up legal entities in dozens of countries allowing customers that didn't want to deal with the bureaucracy of setting up overseas branches to employ workers through it.
Deel also announced today that it has achieved over $500 million in annual recurring revenue (ARR) organically, outside of this acquisition. In under five years, the company has grown to 3,000 team members in more than 100 countries. It has been EBITDA positive and consistently generating cash for 18 months.
Bouaziz said, "Global payroll is hard to do and critical to get right. As a company, you want assurances you can pay your teams on time, compliantly, anywhere in the world. PaySpace’s single-platform payroll expertise and breadth of coverage, particularly in Africa and the Middle East, combined with PayGroup's presence in APAC, will give Deel customers the reach they need to grow their businesses globally. Our long-term vision is to be the most comprehensive payroll system in the world."
PaySpace’s proprietary technology is a cloud native framework built as a single engine. Its platform allows for easy configuration to add additional countries through localization. These localization projects normally take years to complete, but with PaySpace’s innovative technology, it can localize much faster than any other payroll provider.
PaySpace director Clyde van Wyk said, ‘’Like PaySpace, Deel strives to evolve its offering through disruption. We set out to modernize the payroll industry, which was burdened by manual processes and stringent legislative and compliance requirements, much like Deel revolutionized global hiring. This acquisition brings together leading employment services and payroll technology expertise, delivering a unique and powerful customer offering with unrivaled automation, flexibility and scalability."
Published by Globes, Israel business news - en.globes.co.il - on March 5, 2024.
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