Deel eyes more acquisitions after hitting $1 billion annual revenue run rate

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By Jaspreet Singh

(Reuters) – Payroll startup Deel said on Tuesday it crossed $1 billion annual revenue run rate in the first quarter and has earmarked up to $500 million for acquisitions this year to bolster growth.

Customers use Deel’s global payroll platform to manage their international workforce.

Deel, which acquired Safeguard Global’s payroll division for an undisclosed amount in March, allocated an M&A budget of between $200 million and $500 million this year, CEO Alex Bouaziz told Reuters.

The San Francisco, California-based company is still aiming for a 2026 U.S. initial public offering, but it depends on macroeconomic conditions.

Deel said its revenue rose 75% for the twelve months ended April 30. It reported earnings before interest, taxes, depreciation, and amortization margin of 16% for the first quarter, ended March 31.

Bouaziz said he does not know if the company will be able to keep growing at the same level, but “we are going to try our best.”

Founded in 2019, Deel provides services to help companies hire international employees and contractors while ensuring compliance with local labor laws. It also automates payroll processing for businesses operating across multiple countries.

Deel — which has 6,500 employees and more than 35,000 customers including AI startup ElevenLabs, Nike, Klarna, and Shopify — competes with companies such as Rippling, Omnipresent and Automatic Data Processing.

“We believe in the idea that typically, the service you get is tied to how much you are willing to pay … Deel is a bit more premium than most companies,” Bouaziz said.

In March, rival Rippling filed a lawsuit against Deel alleging racketeering, misappropriation of trade secrets and unfair competition, among others.

Deel filed its own lawsuit for defamation in April, saying Rippling has been running a multi-year smear campaign against it. The company also believes the allegations by Rippling are driven by the fact that “Deel is winning in the market.”

(Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)