You may or may not have seen the Twitter post flying around this week - it showcases Deel (admittedly, a post created by them) as one of the fastest companies to reach $100m ARR, especially compared to their other ‘fastest-companies-to-reach-$100m’ compatriots.

I figured this would be a good time to take a pause on profiling web3 companies and focus on good ol’ SaaS.

Deel’s growth has been impressive - founded in 2018, entered YC, and raised its seed round in 2019. In 2020, the company raised its Series A and Series B, followed by two subsequent rounds the following year for a total amount raised of $629 million since its founding.

Today, we’re figuring out the Deel (sorry) behind Deel’s rapid rise.

Let’s get to it!

The Rise and Rise of Deel

If there’s a point in time when you’d want to roll out a SaaS platform that enables companies from anywhere to onboard & pay remote workers as quickly as possible, doing so right before a global pandemic forces everyone to work remotely seems opportune.

Deel was founded in 2019 right before the pandemic hit - it was founded by two entrepreneurs, CEO Alex Bouaziz and CRO Shuo Wang.

Deel provides payroll, compliance tools, and other services to help businesses hire remotely.

The company has grown to more than 500 employees in over 60 countries across six different time zones. 

Interestingly, annual recurring revenue went from $4m in 2020, to $50m in 2021, to now $100m only a few months later, which prompted the tweet below:

The Challenge:

I don’t need to spout endless facts about the rise (and larger preference) towards adopting remote working styles and ways of working.

However, the infrastructure to enable companies to make this transition shouldn’t be taken for granted. Some of the challenges include:

• Changing laws

• Different / hybrid ways of working

• Updated regulations

• Rise in DAOs & new forms of payment methods (crypto included)

The Solution:

Companies that can offer a remote-first workforce can recruit from anywhere in the world - by removing the constraint of only hiring from within their local neighbourhood, the talent pool widens to allow companies to access a more competitive job market.

Deel claims to allow businesses to hire employees and contractors in less than 5 minutes without needing a local entity. It also says that it gives companies the ability to pay teams in more than 150 currencies with “just a click.”

Product:

Compliance Solution:

When working with a globally distributed workforce, one of the key requirements is to localize your contracts to suit the local laws of each country you’re hiring in.

If you don’t, then you’re taking on a lot of unnecessary risk.

With the Deel dashboard, a company can:

• Edit, sign and store contracts in a couple of minutes

• Localize the contracts for employees and contractors

• Automatically update existing contracts based on any local law changes

• Collect taxes, permits and compliance docs instantly

• Keep a central repository for all documents

Payments solution:

Deel’s Payment solution is equally impressive, allowing customers to:

• Pay team memebrs in one click

• Generate reports automatically

• Calculate and pay taxes, pensions and other local government fees

• Use a Deel Card to get paid early

• Allow contractors to receive their paycheck up to 30 days earlier

Conclusion:

While Deel have established a foothold in this market, increasing competition and a changing payments landscape (due to the advent of crypto/decentralized money) means that Deel need to stay ahead of the curve to maintain its growth.

I recently read a tweet thread by the CEO with lessons learned that I can resonate with.

Curious to see Deel’s growth as they continue to navigate the Compliance & Payments space - getting to $100m ARR from $50m a few months ago is seriously impressive. Can they maintain that rate?

📚 Things I read this week:

1. Investing in Beam: Gen Z, Social Impact and Commerce

A good breakdown of Beam - a smart, intuitive way to easily direct spending to non-profits at no extra cost. After reading this breakdown, this company sounds like a no-brainer.

2. The companies making the metaverse a reality

CBInsights’ latest landscape report on the metaverse ‘layers’:

Until next time

I hope you enjoyed this week’s edition - I'd love it if you shared it with a friend or two. Got feedback? Reply to this email or tweet at me and let’s chat.

Fahim