By Abhay Ray 
Introduction
Human resources software startup Deel has announced its intention to go public as early as 2026, following a surge in revenue and a valuation increase to $12.6 billion. The company is preparing for its IPO while addressing a lawsuit over money laundering allegations, which it denies. Stay tuned for more on Deel’s journey to the public market.
What is Deel ?
Deel was founded in 2019 by Alex Bouaziz, Shuo Wang, and Ofer Simon, is an Israeli-American payroll and human resources company, based in San Francisco, California. Deel is the all-in-one HR platform for global teams. That means end-to-end HR management for any team, anywhere. Compliantly hire, onboard, and pay full-time employees or independent contractors in minutes. For the first time, you’ll have a central view of your entire workforce in one single place.
With Deel, companies make global payroll possible by leveraging Deel’s in-house back office and locally-owned entities. Workers, managers, and leaders can update withdrawal details, visualize team structure, oversee total payroll spending, and complete dozens of other tasks through Deel’s modern self-serve interface.
Deel IPO Plans
Deel, a global human resources and payroll platform, is preparing for a potential initial public offering (IPO) in 2026. CEO Alex Bouaziz stated, “We are getting ready to go out, potentially next year or a bit later. We believe we have the right reasons to go public.” The company recently secured a $300 million secondary transaction, valuing it at over $12 billion, and reported an annual revenue rate of $800 million in 2024, reflecting 70% growth compared to 2023. However, Deel faces legal challenges, including a federal lawsuit filed in Florida alleging unauthorized money transmissions and facilitation of money laundering. The company denies these allegations and is filing to dismiss the lawsuit.
Deel’s recent share offering brought in two new shareholders, announcing that General Catalyst and a sovereign wealth fund were included in the recent offering. The wealth fund is believed to be Mubadala Investment Co., according to CNBC. Mubadala is Abu Dhabi’s sovereign wealth fund. The company’s valuation rose to $12.6 billion from $12 billion.
Deel Continues Growth
Deel continues to strengthen its platform. In 2019 when it emerged from Y Combinator with a two-product hiring solution it has continuously added applications to the platform. It now consists of a full stack HR and Payroll solutions. These include HRIS, payroll, compliance, benefits, Performance with customers in 150 countries. The latest addition to the platform was made in December 2024 with the acquisition of pay compensation vendor Assemble.
The firm has also strengthened its board. In 2024 it appointed Francis deSouza, former CEO of Illumina and former board member of the Walt Disney Corporation. It also appointed Todd Ford, veteran board member and joint President and CFO at Coupa Software.
Bouaziz concluded, “2024 was a remarkable year in terms of business and infrastructure growth, plus product innovation. We’re gearing up for an even bigger 2025. We look forward to working with new anchor investors to continue our momentum in the years ahead.”
Deel’s Unit Economics and Financial Performance:
- Deel has maintained impressive unit economics with 85% gross margins, placing it in the top 15% of all public SaaS companies.
- Deel has been EBITDA positive since September 2022, demonstrating its ability to generate profits while maintaining rapid growth
Deel’s Success can be Attributed to Several key Factors:
- Expansion into new markets: Deel has expanded its footprint into Africa and other emerging markets, tapping into the vast potential of these regions. This strategic move has not only increased its customer base but also positioned Deel as a strong player in the global HR tech landscape.
- Strategic acquisitions: Deel has made strategic acquisitions, such as Playgroup and Capbase, which have helped it grow its customer base and revenue. These acquisitions have also allowed Deel to expand its service offerings, making it a more attractive option for businesses looking for comprehensive HR solutions.
- Strong customer retention: Deel’s “care-first” approach to customer service has contributed to high customer retention rates, further driving revenue growth. By focusing on customer satisfaction and support, Deel has been able to build strong, long-lasting relationships with its clients.
- Growing demand for remote work and global hiring: The trend of remote work and global hiring, accelerated by the COVID-19 pandemic, has increased demand for Deel’s services. As businesses continue to embrace remote work and expand their global presence, Deel’s offerings become increasingly valuable.
Motion to Dismiss ‘baseless’ lawsuit
Against the backdrop of financial milestones and progress toward an IPO, Deel is currently facing litigation over claims that it facilitated money laundering transactions.
Last month, Deel was served a lawsuit in a Florida court which alleges it processed payments without proper licensing and enabled money laundering in relation to illegal payment transactions worth at least $2.27 million made on behalf of a former client, Surge Capital Ventures. It also accuses Deel of facilitating payments to Russia in violation of U.S. sanctions. Deel strongly denies the claims and has fired back with a motion to dismiss the lawsuit, describing it as “riddled with baseless allegations, gross inaccuracies, conjecture, and downright falsehoods.
Conclusion
Deel’s IPO could help to reinvigorate the listings market, which saw a sharp slowdown in 2022 as U.S. interest rates rose. The IPO market has seen a steady recovery since then, but the volume of IPOs remains below levels since 2019. If interest rates continue to fall and equity valuations rise, it could put 2025 on course to continue the recovery. A Deel IPO, given its valuation, would help to propel that growth. Deel’s impressive revenue growth, strategic expansion into new markets, and strong financial performance position it well for an IPO as early as 2026.
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