Deel CEO Alex Bouaziz on Raising $300M+ at a $17BN Valuation

Well, thank you for having me. We actually did a stage together not too long ago, right, in Paris or something like that.

Well, I’m I’m very excited to do this with you. It’s been a while, and thank you for being a a great friend and amazing.

Yes. Well, it’s been a while actually since we’ve raised primary money. We did a small round in, I think, 2023. But since then, like, I think the last time we raised significant primary capital was in 2021. So I think the big news for us is we’re actually gonna announce a round of over $300,000,000 at over $17,000,000,000 plus in valuation. So it’s gonna be a big deal for us, and we’re super excited to share that with the rest of the world and and actually the company because you’re getting this a bit early.

So I’m genuinely so excited about our investors. It’s actually co led by three investors. The first one is Ribbit Capital, which is our new investor. It’s actually the first time that they invest into Deel. I actually love the team there. I’ve been trying to get them to invest into Deel for since our Series A, I think, actually. And then by our amazing and long standing investors from Andreessen Horowitz and Coatue. So three of them actually are co leading this round.

Yeah. And, you know, it’s quite interesting because Deel has been a profitable company for three years now. So we’ve been generating which is always a great thing to do. And we haven’t needed investment for for quite a long time. I think there’s a couple of things here that were very critical for us. First, we’ve been pretty aggressive on the M and A front. I think we’ve done about 13 acquisitions, which really helped us grow really fast, build new products, bring amazing funders in, and really kind of take over a big part of the global payroll market share.

So, you know, bringing in from new fresh capital and resetting the valuation is also something that’s important to the actual value of the company. The second part is that, like I was telling you, I think Micky and Nik are some of the best investors in the world, I wanted them involved in the business for a very long time. So them wanting to invest with the Coatue team, with the a16z team was a great opportunity, and it just made sense to to kinda go for it when they came with the offer.

Yeah. So, obviously, I can talk about ongoing litigations. I think it’s unfortunate that the the way they’re trying to compete is through media and through headlines and things like that. But I think the thing that really matters is how the business has been growing. Right? Actually, we’re going to announce as well that September was our first 100,000,000 revenue month, which is a very exciting milestone for the business. And, you know, I think this round, these new investors, our board has always been with us, kind of shows for where we stand as a company towards this type of litigations.

And, you know, we’re looking forward on building for our customers and being focused on delivering.

So I I think I can’t really comment on Rippling. I would say that we’re kind of in the middle. I’m not a Silicon Valley based founder, but we do have Y Combinator as an investor. They were one of our early backers. I would say that there is advantages into being in the Valley. Right? I think seeing a lot of people and, you know, them understanding the business very thoroughly is very important. I think a good example for us is looking at Deel from outside of the valley.

You’re the hero until you kind of become the villain and then back to the hero story because people were kind of looking at us thinking, they’re growing so fast. It’s so amazing. They’re growing so fast. It’s so amazing. How are they growing so fast? Right. And like, if you’re not in the valley and people don’t understand you, they can, you know, have a lot of questions. And if you’re not there to answer them, you’re not in the side conversation. It’s a bit harder. Not that it matters, to be honest, because it hasn’t mattered to us.

I actually think a good learning for me is pros and cons on this. I’m not I’m not a 100% sure how I feel towards it, but the fact that we didn’t raise money since 2021, if you were not really counting 2023, means that actually didn’t spend a lot of time with investors. So no one actually knew our numbers apart from our shareholders. We’ve been buying every single secondary on the market every single time they could. So a lot of people were kind of looking at us, like announcing 1,000,000,000 in ARR and being like, what’s going on there?

We don’t really understand it. So I think maybe that would have been a good learning opportunity to spending more time with investors on my side, just that they really understand how fast we’re growing and why we’re actually growing, which is the most important part.

I’d say it’s it’s like it’s kind of a mix. Right? Because as a founder, you wanna be super focused on your business. But if you look at Jack’s growth, it’s, like, outstanding. Right? And you’re thinking, okay. Like, it’s an Australian founder and based in the valley. How is this business growing as fast when some similar businesses in The US are not growing as fast? And I think there is value into actually spending time educating investors that may be your investors of tomorrow. That was maybe a small mistake we made where fact that we’ve been profitable kinda, like, made us not go out in the market as much.

Again, I didn’t pay attention too much to it because I knew I know where we stand. I know the facts. And I think, you know, having our board behind us has been has been really helpful. I think it’s always interesting. Right? Like, this wartime versus peacetime CEO concept as well. Right? And funnily enough, Ben is like my board member. I spend a lot of time with him. So it’s always amazing to learn from him. There is moments where you need to understand where you’re strong and where you’re not strong.

Right? Like, which fields do you play in? When do you play your hands and how do you do it? We took an approach that really worked for us, which is like focus on what we know how to do best, focus on like navigating the stories in the places that are important for us and telling our truth. And I think that was the the best thing to do. There’s a lot of work to be done, to be very honest with you. And feel pretty confident that the same way we’ve been winning in the marketplace, we’ll win in the court of law.

So it’s just, we just need to play it out. I do think one interesting thing, I was telling you about is like, I’ve learned a lot about the media as well. It’s like, you know, I’ve never really looked at it from this eyes, but you see like this big tech journals that are kind of going and like making up stories for clicks, which, you know, when I was a bit younger or maybe like an early stage founder, like, you know, our dream was to get on like some of those articles, right?

And like when you see the things that they can publish with unnamed sources that are completely false, with no retractions and things like that, you can start thinking that in many ways, there’s something super broken about media, and I’m looking forward to someone solving that problem really. Did you flee to Dubai? No. I’m very happy living in Tel Aviv, and I’ve been living here for the last five years.

No. Of course. I mean, you know, the person that gets a bit more pissed is maybe my wife because she reads some of the stories, she’s like, I know that’s not true. On my side, I try my best not to, right, always because there’s so many things that are happening in the business. Our customers give us our trust and they understand where we’re going. I think a lot of the facts also make it a lot easier to explain many of the things that that are being said and that are not true.

So I I don’t think about it. I definitely don’t think about as much as maybe in March, right, when I had to deal with, like, the early stage of the litigation. By now, it’s, old school, old news for us until we really can beat it out in the court of law. So I think I’m being rigorous enough where I try to focus on my customers because that’s done your way. Right? And if anything, I think it’s proven to be the right way of dealing with it, and we’ve been able to really grow in the last two quarters, which actually shows for an amazing

Yeah. There’s different ways of dealing with this in general. I think my stance is when I feel right in my shoes and I know what I’m doing, know where we’re going, there’s no point in trying to fight useless battles, right? Like, let’s win in the court of law, let’s put this behind us, just like, I don’t know if you saw, but we had something in January, a similar lawsuit that we believe came from a similar company. Putting that to bed was the best way of showing that we know what we’re doing and we’re doing great.

I think being hands on is very critical for the business as you grow. I think the worst mistake you can make as the company scale is to be too far away from the business to really know what the problems really are. I think this is kinda like a cultural point for Deel. Right? Top down, all of my leaders are hands on. And then if my leaders are hands on, middle management is hands on, and I see this the exact same way. So I think culturally, it’s always been very important for us as a business.

It’s always been very important for me and it really helped me navigate different paths of growth, new products, or even spotting gaps into the organization. Right? I think every company at more than 50, a 100 people start having flows in their designs, their org, in terms of response time, in terms of how things are happening. And if you are 10,000 fits above looking down at like the organization, hoping to figure out what’s wrong, it just doesn’t really work. So being actually even being seen by our customers, because it’s not just you, right, and our investor, my customers, I get a lot people pinging me about, hey, like, I have a problem with this, etcetera, directly.

That really does help me have a better view of, like, what’s wrong in the organization in an everyday basis. And when you’re growing at the pace where we are, right, like billions in our profitable business, acquisitions, 7,000 people around the world today. Like, it’s very easy to lose sight of what’s going on if you’re not really hands on and really focused.

Not that many. I’m not Jensen at all. I have, like, 20 or a little over 20. The thing is my direct reports are really strong. So I’ve never had one on ones with them. I’ve never truly had performance reviews with them. I kind of give them continuous feedback all the time. And we talk all the time. We work all the time. And that is, I think, a much better setup from a hierarchy perspective than the traditional, like, I only have a few reports and I talk to them on a one on one cadence every week or whatever that is.

I speak to them all the time. Literally. If you if you take any of my reports, they get messages from me or they send me messages every day. My my job the way I view my job is I’m here to enable. So what’s broken, what’s not working, why is it not working? What can I do to make it better for you? Is it resources? Is it just prioritization? Is it reorging? Like, my job is kind of like looking at the different parts of the organization and being present for you to be your best self.

Right? And do your best work and being hands on with them in the problems they see every day really enables me to do that.

I wish I worked nine nine six. I think I work a little harder than that personally, and I think most of my leadership does too. But I just don’t think it it works at scale really. Right? Like, I there’s moments in the company where you need to push hard, and there’s moments where things are a bit more in control. I actually like to break down this in like different organization, like not everybody needs to be going at a thousand miles per hours all the time. Some parts of the organization at a very specific moment need to.

And as long as you’re in control and you’re pushing for the right places at the right time, you’re not going to burn for amazing talent. Right? So actually being hands on is very helpful in there. Right? When you’re able to say, okay, you know what? Like, that product is not good enough. Open the wire room. Everybody’s gonna work more than nine nine six for a couple weeks to get it ready. That makes a lot of sense to me. If you’re just pushing the pedal all the time, you’re not gonna do yourself a favor, and your team is just not gonna work out.

I’ve done less secondaries than you think, actually.

because and I’m not gonna name anyone. But I do think that a lot of my friends that have built amazing businesses go through like this awkward phase where they’ve made enough money to not work as much anymore. And a lot of things happens in their life because they get pulled by so many different external topics that want their attention. And the business starts stagnating a little bit because I do think like founders create a lot of momentum within organization until they actually get pulled back when they see the business is not as growing anymore and they start having maybe some troubles with their board and things like that.

So I actually do think it has a form of a negative impact if you’re not thought out about how you’re gonna manage this at scale and how this is going to impact your day to day work. How does it have a negative impact? Very pragmatic. Right? Like, if you never had money and you suddenly have a lot of money on your bank account and you start spending it on a lot of different things, then your mind is just somewhere

No. A tier founders as well. I’ve seen it happen

with amazing founders. It’s easy to get lost. And eventually, you get a big reminder of why you’re here and you get your ask kicked. Because no matter how many of them has made money, it’s typically not as much as it can be a lot of money, but it’s it’s not as much as the potential of money they can make over time. Right? And there’s a lot of people eventually on your cap table. They’re here to remind you that they’ve trusted you with a lot of money and they want you to deliver on the promises you have.

So if you’re very thought out about what it means to you and how you’re going to manage this and how it’s going to affect your life over time, then it’s fine because it is going to affect your life. Right? I’ve seen that trap happen to a few of my friends, but thankfully, they’ve turned it around big time, so I can’t can’t say anything bad.

Maybe. I think there’s a moment where you’re, like, hot shit. Everybody wants to invest. You’re getting term shifts left and right where you start being inconsiderate. But I actually kind of like have gone through enough cycles now, although it’s not been exactly a long time, where I actually kind of regret not having been some of those times slightly maybe nicer or more considerate than I was. And, you know, I see it with some of my friends or some people that are racing like crazy runs right now where my take is like, at some point, everything that goes up must go down.

And at that point in time is when you start thinking, maybe I shouldn’t have done this or I shouldn’t have done that. Right. Then I think I don’t think I was that intense on this. I’m sure I’m sure some people might think I was. If I if it was, it wasn’t very intentional. So I’m sorry. But I I do think that over time, it happens to founders that build companies that have significant traction for a short amount of time.

I I have some crazy stories that are not good stories, so I can’t really share those ones. You you can. One of our investor at our series a calling me about COVID and telling me, you need to fire everyone and stop doing whatever you’re doing, Cause COVID is gonna kill the company. And me answering to them, no, we’re doing okay. We’re actually gonna raise a series a. And getting back channels from this saying, the guy thinks you’re a carpet seller. He thinks that you’re bullshitting for your for your series a and there’s nothing that’s going to happen.

And then me going back to two weeks later with a term sheet from Andreessen Horowitz, telling them, look, this is my series a, but, you know, you weren’t very nice to me, so you’re not getting your pro rata. That that was a funny story for sure. I would I would say, look, if you wanted, like, a crazy story, I mean, we did raise $700,000,000 from my living room in Tel Aviv. Right? Like, on Zoom without meeting any of our investors.

What do mean? Every single round we raised was during COVID twenty twenty, 2021, 2022. I was in Tel Aviv, you know. So I did raise most of the capital we had in the company without meeting our our investor. Actually, you know what? The Ribbit guys flew in to see me, and I flew like, we kinda met halfway in the country. And that was the first time I ever had a closing dinner in my life.

Yeah. But yeah. I mean, I agree with you, 100%. But, you know, in 2020, 2021, I couldn’t be in person. And this is when we raised most of our money. So and we didn’t do any big fundraise until this one now. Right? So that was my experience. Right? That from fundraising, we were actually meeting meeting people.

No. Because I think m and a is a very viable option, a very viable option. And I think the higher you are, the harder it is to get done. It depends what you want in life, and it depends how big your business is actually gonna be. I’ve been trying to go for the home run. I’m very glad I did in terms of like the ambition. We still have a lot of work to do, but I’m very glad that we went for the billion dollar valuation and all of those things.

It could have backfired as well. So I think that was much more naive from my part, which worked out. Okay? But I do think that there is some optimization where you need to think about the future of the company, and highest valuation does not always mean best outcome for the business and the people.

I mean, you know, I think Andreessen Horowitz has been adding tremendous value. And I’m not saying that for, like, they help me find board members. They help me place amazing people in the business. I think General Catalyst Have Andreessen been the best? I think Andreessen has been top tier by far. They’ve always been super supportive through rainbows and unicorns all the way to shitstorms. They stood by us like no investor ever did. I think in a journey, if you can get investors that are value aligned with you and that truly care about the business, not just the return, then you can make good friends that you can, like, entrust yourself with.

It’s a long and tough journey.

means you didn’t spend time with me before.

Yeah. No. That’s a mistake. I think building relationship with great people is helpful. And I think there’s a lot of ways for founders to make those meetings useful. For example, I would have never taken a meeting with an investor. Building up the relationship, the outcome of that meeting wouldn’t be, for example, like two, three business intros of potential customers. Right? So yeah, there’s value for you. There’s value for me. If I can get a bit more value, it’s even better. Do you share numbers in those meetings?

I share high level numbers. Why not? Like, the thing is most of your numbers are available if someone really wants to figure them out. Right? Like, it doesn’t truly matter. Don’t believe in, like, hiding numbers. The way I think about venture capital transactions, it’s not them giving like, sure, very early on, it’s them giving you money to try to build something knowing it’s gonna fail. But as you grow as a company and there’s a brighter future and a clearer vision of where it’s going, I see this much more as a transaction where it’s you selling them a part of your business for them bringing you value, which goes beyond money.

I think so. If you wanna assemble the best team in the world, you gotta have the best investors in the world. And I think in many different ways, they can help you attract talent, they can help you attract more capital, they can help you navigate through complex situations that they have lived before. Right? Like, every time I talk to Ben, right, like, it’s crazy the amount of knowledge that he has. Right? It’s crazy the amount of pattern matching that he has in terms of how the business

knowledge. Okay. I hope he doesn’t get mad at me for saying that one. But in his mind, most chief marketing officers are not good. The truth is, I actually agree with him. For a while, I was looking for a CMO with this experience, that experience, that experience. And what I realized is like, the best CMOs I’ve encountered over the last few years are the ones that are just able to be so much more first principle into understanding what’s going on and going really deep into the data instead of being super superficial.

And you don’t usually get that from a traditional CMO background. So like the contrarian stance me and him have kind of developed is that your CMO should be an engineer.

But that’s not the classic CMO background. So, like, there’s amazing people at brand. There’s amazing people at lots of different things. I think if you wanna efficiently drive marketing strategy at, a high intense growth company, you gotta be much more engineer in my ground. Right? Like, I was sitting with the CMO of who is who is, like, one of the strongest CMOs I’ve met in a long time. You should probably interview her. She’s, like, a massive magic weapon. The way she just fought through some things that are just accepted in marketing.

Right? Oh, we’re spending x amount of money on paid ads, that’s returning x. Kinda like taking over the role, kinda going back and saying, that is a lot of money. Let’s go back. Let’s understand. Let’s deeply understand how this works. I think being able to like cut spend by half, but increasing the number of leads by half, just going really deep into understanding the problem. Only people that care about truly understanding how the system work deeply can get done is what I found to be the right people for all roles, but specifically for

is what 50% for me is a lot of money. Right? So I actually wanna wanna make sure I’m optimized on this.

this is new to me. By the way, Nick is my favorite founder, probably the person I look up to the most in many different ways. He knows that. It’s aligned. Yes. A thousand percent. But now, not before. So I think when I look at deal and growth over the next few years, the only way for us to be what I think we can be, which is a $100,000,000,000 plus company that truly changes how HR and payroll is perceived and really disrupts this this whole market is for a brand to be aligned and for the brand to be much more known.

Right? And that didn’t actually matter to me two or three years ago. But today, I see the path to get to the numbers we want, which is not insane, by the way. Like, what I told what I love to tell investors is like, okay, today we have yeah. Have you done any consumer deals or are you, like, anti consumer?

Okay. Like, what would you say to like, if I was a company coming to you and telling you, okay, today we have 1,500,000 people getting paid on deal. We’re gonna get this to 10,000,000 people. Would you think that’s crazy? No. Okay. So 10,000,000 people, given that today we’re over 1,000,000,000 in ARR would mean, like, quite a bit more revenue. Right? So

But you can also push that even further. Like, again, consumer investors. If I was telling you that we will do payroll for a 100,000,000 people over the next few years,

you mean everyone needs payroll. Every single person in the world gets payrolled almost. Right? Like, okay, maybe not every single person or most people in the world get payrolled. Right?

your TAM.

single

I do payroll for oil and gas, for agriculture companies, for airlines. You’re wrong. We do payroll for a lot of people.

It depends how much I spend on brand awareness. No. Really? No. No. It doesn’t. Well, we’ll see. I think we can be very aggressively winning most of the market. I actually think the gap between 10 to 100,000,000 over the next five to ten years is not that big. If the brand is known,

Well, we’ll do some of those, actually. So you’ll see some of them coming already in the works. The thing about brand marketing is I actually don’t know the subject well enough. So you’re gonna have to give me a little bit of time to get educated in terms of how this works properly, and we’ll probably make a bunch of mistakes in in the meantime, but we’re going to try really hard. I do think there’s value into F1, into football, into golf and things like that. For us, it’s an interesting thing to navigate because like, I want to be able to kind of make both sides of the equation happy.

So, you know, if we own b to b assets that we can bring, you know, customers at events and things like that, it’s great for short like, investing into our customers and getting them to to be excited about the company. But at the same time, if I can get the end user and the funds excited, excited, I think there’s, like, a long term value aligned brand here as well.

cut spend on the pure paid marketing side. I think that’d be cool. And I think that comes from brand awareness. The bigger your brand, the less you need to pay per leads. That’s very aligned in terms of where we wanna go. Obviously, deal is a very operations heavy business because, you know, we have maybe a couple thousand people in operations around the world. And I think over time, you know, with AI and with a lot of the infrastructure we’re building, we’ll be able to have, you know, the best performers at the business and and reshuffle there a little bit.

Pure operations. Right? Like automating through agents, task one, two, three, four, five, six, they’re being done manually today until they’re fully automated through tech. Right? Like, just being able to bring, like, a Manners dot AI type of software, really a big game changing impact for us. Do you use Manners today? We use a competitor and them until one of them becomes good enough for our solution. But I really like the Manners guys, so I think they might be it. But they’re not good enough today? No.

Because it’s so early.

Yeah. We built a lot of AI stuff. So so one super interesting thing at Deel that has actually been probably the best investment we’ve made at the company is we built our own knowledge base. So two, three years ago, I was talking to one of my board member and telling them how you we have like that very unique knowledge, Like global employment, global benefits, global payroll, very, very detailed kind of like mini encyclopedia ad deal with like 20,000 articles and like 70,000 different data points changing every year.

I was talking to my board member, we were keeping this in like Google doc and Notion. I was like, know, I think this is going to be one of the biggest thing I deal, right? Like if we can actually know our knowledge and own it, it’s gonna just make such a big difference for how we operate. And I was jamming at night with Sebastian, actually, Clarna, who is, like, thinking about AI twenty four seven and probably one of the sharpest mind in terms of, like, integrating AI into your business.

And I was like, Sebastian, I need to do something about this. And he came to me and he said, you know, I’m actually building our own knowledge base inside of Wiki GS internally, and it’s working really well. And I’m like, shit, that’s actually brilliant. Right? Because you can build parameters, you can build your own infrastructure, and then you can layer AI on top of your own data so you’re in full control and there is no hallucination. You actually own the data itself.

And we did that, like, over the last two years, and it’s probably one of the best investments in the world we could have ever done because, like, every single time you come and talk to us, we’re able to get the right data almost straight away about a very specific use case we’re talking about, which is impossible for for most other people to get, you know.

We underinvested in our internal tools and processes. I told you, I look up to Nik a lot. And Nik’s mantra is build everything. If you own everything, do everything well. So I don’t know if you know, but Revolut builds everything. I think he’s right. I think in many ways, like, a software is a lot of SaaS are not tailored enough to the different applications that we wanna build and owning most of the software makes a significant difference in many different places. But let let me give you a very small project that we’re very excited about.

A very, like, strong example. Over the last year, we built our own Jira like product internally. So basically, like, ticket management at scale, because being able to route the right tickets to the right person. So let’s say you have a primary customer, you wanna talk to payroll, you wanna talk to HR, you wanna talk to finance, whatever that is. Being able to write your own tickets is very critical. Right? And like no software was really agile enough to be able to do this.

And now what we’re launching like this week internally is like the ability to just as a salesperson, as a CSM at whatever, within the company, being able to type your problem and like basically with AI automatically create the right ticket, automatically routing it to the right person and cutting the time at like 90% in terms of resolution that we can have. And like that only comes from being able to build a lot of your internal infrastructure. It’s the dumbest thing to do when you’re small, but it’s the smartest thing to do, I think, as you scale.

And the moment at which we should have started should have been a lot earlier because when we knew we were on the path of, like, we know where we’re going, we can start making longer investments and longer bets, we should have, like, transitioned this a little bit.

Couple 100% year on year growth plus profitability is a good sign. When we started here’s another example. Right? Like, building your own payroll engine, like I’m kicking to you about earlier, is like a very bold move. Right? It’s something that you go like, why would you do this? Right? Like, pay fit is a unicorn in France, just doing payroll in France. Gusto is a unicorn in the Decacorn in The US, just doing payroll in The US. Right? So building our own internal infrastructure from ground up with the ambition of rolling out the 100 plus countries is like something that most people will look at and go, you’re a little crazy.

And that’s true. It’s like a very crazy play actually. But, you know, when you’re four years into the business, you’re profitable, you’re on path to grow really fast, you’re have some decisions to make. Right? Like, how big of a company do you really wanna build? Can you make a lot of those long term plays that you think are gonna be significant for the value of the company and for your customers? And that’s where we kinda got into a place where we’re like, okay, do we wanna be an acquisition outcome with a great one to three products?

Or do we wanna actually own the rails, like, as close to the metal as possible in a way that no one has ever done before? I think you can only start making those plays when you are, you know, truly profitable and truly growing at the pace where it’s okay to take a couple 100 people and build the infrastructure that’s gonna serve you tomorrow.

I’m there yet. I’m not there yet. I think for me, what’s most important is we’ve kinda gone through it’s an interesting phase at the company today. We’ve gone through having two amazing products into having now, like, 10. And like for me, the most important is making that system work amazingly well together. So like, I’m not really looking to launch like 10 new products next year. It’s not really my thing. It’s more like, how do we give the best end to end HR and payroll experience to our customers?

And then when I get into a place where I’m like, okay, we’ve kinda like killed the market the same way we had for, like, global payroll, EOR, etcetera, then that’s when we might make more more new bets.

Well, here’s an interesting data point for you. I know you love data. 60% of our revenue actually comes from cross sell today. So cross sell is actually a big part of what we do. Well, expansion, cross sell and expansion as well for our customers. Right? So we do well and they wanna open new countries or they just hire more people and things like that. So the way we’ve done this is basically and I think it’s pretty similar to like a couple other big organization like Oracle and others, but it works really well for us.

We basically have what we call our core salespeople, and they sell their product that we feel are fully mastered inside of the company. Right? From an enablement perspective, from like an experience perspective, from like an end to end perspective, we feel like we’re in full control. Our core is we’ll quickly ramp up and quickly be the best in the market at selling this. And then we have what we call those overlay teams. So it’s like our IT business. So we acquired Huffy, for example, a company you invested in, which is doing amazing for us, you know, it’s grown almost a 100% year on year, is very specialized.

Right? And we’re building a lot of IT products. So you have an overlay team that is brought by the core AE team when this is an interesting product for the customers. But at the same time, it’s a standalone and a lend product. So you can actually have leads that are uninterested in this and they will be the ones selling it before moving into core AE. And we do this across like all of the different products. So immigration, global payroll, all of those different products. And like an interesting thing is over time, some of your product become mature enough and your organization and your data and your knowledge becomes mature enough that you can bring some of those products into the core team.

Right? That’s like our holy grail is for things to be so smooth that I can bring one of those products into the core team rather than having overlays on that front.

One thing I always tell early stage founders that we did really well actually and really helped us. Because if you think about Deel’s revenue split today, 50% from comes from The US, a little over 35% comes from Europe, and the rest is like kind of rest of the world, and we’re growing all parts. One move we did pretty early on is hire salespeople in different geos pretty early on, just to understand the market.

So instead of having like a lot of salespeople just in one country, hiring a few salespeople into other countries and kind of say like, go and figure it out was really helpful for us because it really helped us ramp up across all markets really fast and having a strong understanding of what’s gonna work, what’s not gonna work, and how we should reshape our strategy. For example, we launched Japan two years into the business and like, it didn’t work for the first year and a half. And then eventually we changed country leads with all of the learnings from the first one.

And now it’s doing really well. And all of this kind of happens in parallel where like, a lot of people are like, yeah, it’s gonna defocus you. You shouldn’t be doing that. I’m like, hire a sales guy and see if he sells or if she sells. And if they do, amazing. You can ramp up and hire more of them. If they don’t, then it’s fine. You’ll let them go and change them.

I don’t think having one person running around when you’re like 10 people, 20 people trying to sell something is

defocusing. The only thing that can be defocusing is if they come and start telling you, you know, for Brazil, I need this specific thing for this country and here, you just say like, no. Sell what you have. But I really don’t think having salespeople in different places is defocusing, and that really helped us move really fast in shaping go to market.

I thought when it comes to sell,

I don’t think there is any defocus. Because if they sell, it works. Then if it works, you’d be the happiest person in the world to give them more resources. If it doesn’t work, it’s okay. You tried.

30% Europe, but in those numbers.

It’ll be more or less the same. It hasn’t changed from 1,000,000 ARR to this stage, so I don’t think it will change.

made the most of them.

Hoffy is very successful. This is why you backed them in the first place. It can be a $10,000,000,000 company. I think deal IT so basically, what we do with acquisitions, we have a quite an interesting playbook. I think that’s what most of the investors were mentioning you. What we do is we do two types of acquisitions. We either do acquisitions that are core to our market, and then we, in a way, buy the team, the revenue, bring them in house, and kind of rip and replace their infrastructure with ours pretty fast, and we’re pretty good at this actually.

Or we buy smaller companies that are in adjacent domains that we wanna get into. And what we usually do is we we don’t try to patch things together. We take the founders and we rebuild the full infrastructure from ground up. And the way we do this is kinda interesting because it really worked for us. So theory of sales, most salespeople take nine months to a year to be comfortable selling a product. And in that process, you’re gonna have a couple early adopters, which are actually the best people in your organization.

They’re willing to try to sell something new because they’re curious and they want to. And what happens with acquisition and the way we operate is we basically bring the product, rebuild all of the front end inside of Deel while being connected to the back end of the current company. And that happens in like two months. So we can basically like launch the product that we’ve just acquired in the space of two months, and then give it in the hands of our sales organization so they can start learning how to sell it.

In parallel, we’re rebuilding the full back end of the product inside of Deel natively. And in the period of like, depending on how complex the product is, it takes us like three months to twelve months to rebuild the full back end and migrate all of the customers and all of those things in parallel. But in parallel, your sales org start selling your product. The early adopters see the IT and they start selling it. And, you know, it doesn’t work as well sometimes, and it takes time to ramp up, time to fix bugs, and they hate you for having sold this.

But over time, you learn so much that you can really quickly, quickly close the gap and build the best product really, really fast. So that when the organization decide itself that it’s ready, which is like usually nine months later, you can actually start ramping it up and selling it much more aggressively because it’s amazing and it really works. If we weren’t doing this, you would basically spend twelve months integrating and then start selling and have another delta of like twelve months to be able to really reach the scale that your go to market team needs to have.

So that like very interesting playbook of, like, integrating the front end, giving it to yourselves, or migrating all the customers in parallel in the back end, like, really paid dividends to us. And all of the acquisitions we have have grown by, like, hundreds, if not thousands of percent in the last few years.

Yeah. I have one funding principle, and it’s actually who came to me from my father. So my father in his past life did over 50 plus M and A, that’s actually how he grew his business. One thing he taught me on deal making was the only way to get a great deal done. If both parties come out of the equation five years later saying, we’re happy this deal was actually happened. So structuring the deal in a way that’s fair for both sides, even if you have the upper hand, making it in a way that like you look back on this and say, hey, you know what, as the founder of the other business, I’m so happy this deal went through is the most important part.

So whether it’s on retention package, whether it’s on like how many people from the team you keep, whether it’s on like how brutal you are about the integration, like a lot of the things that go there need to be aligned so that you’re optimizing for both sides to be really happy about the deal. And it’s not obvious because like a lot of those negotiations transparently, like, we have the upper end as the company that’s buying, right? So we could be assholes and be like, whatever, you know, I’ll just get the best deal possible.

But sometimes we’ll over optimize on, like, the outcome of the acquisition down the line versus the best deal we could get.

Yes. Of course. And I think this fundraise is definitely going to be helping on that front and doing more acquisitions. That was one of the reason we also raised the capital. As you know, venture capital always comes in flavor of what’s what’s everybody looking at at the moment. Right? So this comes in circles. Right? And in cycles. Right? So eventually things will shift. And I think the companies that are maybe not AI first or in that AI hype just need to kinda hold tight and make sure that they deliver for their customers and stay close to their customers and kinda rise above the noise.

If they can do that, I think, you know, they’ll come up on the on the stronger hands. If they cannot do that and they’re amazing, then, we’re always looking to buy.

It’s situational. Sometimes we make acquisitions where we we really want the founder to stay, and sometimes we actually don’t think the funder is needed. So I’m gonna assume you’re talking about the the part where we do want the funder to stay. And if we

Yeah. Why not? Like, it’s not it’s not a bad thing. Right? Like, when you get to a point where you’ve worked for seven, eight years in your business, there’s kind of two ways to behave. Right? First way of behaving is acting like you’re gonna be there for the next five years and then leaving after one year, which I’ve seen many people do. Or there is just being honest, like, hey, is this what you wanna do for the rest of your life? Is this where you wanna work?

Like, if you give if we give you the resources, if we give you the infrastructure, do you wanna be here for a long time? And again, you cannot always measure those conversations and you’re not maybe not always gonna get the right honest answer, but I think it’s important to have, like, frank and honest conversations here. And, for example, going back to Huffy, when we acquired Huffy, like I was not gonna run the IT. Right? Like it’s it’s so far out of my scope in terms of like truly understanding the business, the buyer, the profile, what we need to build, etcetera.

That like if you remove Sammy and Michael, it’s it’s going to be very tough. Right? So like the alignment here has to be very packaged equity oriented. It has to be very aligned that like they’re going to be here for a long time and they’re here to really build some other companies, you know, it’s a bit different where actually, if anything, I don’t even need the leadership. Right. I just want the customers to in front of you, things that they have. Right? So being very upfront around like, hey, is what we’re gonna need just sets you up for a better relationship.

This is what I told you before. It’s about keeping people happy. I’ve made the mistake of keeping a founder for a year or two into a business where he wasn’t needed anymore. And it’s sad. They lose their grit. They lose their effects, and it just doesn’t work out. So having this conversation, I think, is part of creating a deal where both sides of the equation come out happy.

I like to pay fair market value. So revenue, growth, quality of the team, gross margins, potential of the business. You know, we’ll pay depending on, like, how and in that case, adding a full new line of business to deal, which is very critical. Right? Not just being core product. We’ll pay the right price. We won’t overpay. We won’t underpay. And we’re known to pay the fair price. So if it wasn’t between a 50 and a 100, I’ll go at 75, probably.

Pay Space. So Pay Space is a company amazing company. We acquired them about a year plus ago. Fifteen year old business. Three brothers and one brother from another mother, that’s how they like to talk about themselves, in South Africa. And they basically had been building the payroll infrastructure we wanted to build for the last few years. We looked at every single company in the market, and I have a very aggressive corp dev team as you may realize. And nothing, nothing was good. Most of the infrastructure, most of the technology, most of the teams were very weak.

And we just stumbled upon that team in South Africa that not only understood payroll really well, but were forced to build the global payroll because South Africa was such a tiny market that they had to expand to all countries in Africa in order to be able to create a real business that can really scale to their ambition. And without realizing, they had built payroll infrastructure that could scale in multiple countries because they were forced into it from the get go. And we met them and we looked at the product and we said that is probably one of the best product we’ve ever seen.

We’re just gonna bring it in house, give them the resources, and just start building out on top of this, like all of the infrastructure we really need. One year into this, we’ve got infrastructure in Singapore, in Canada, in Australia, in India, in Malaysia, like, and we’re building, like, 10 to 15 new engines per year. And that is giving such an incredible experience to our customers. If I would have gone into building payroll engines and infrastructure on my own, it would have taken me five to ten years to get it right.

That just fast tracked everything we could do in, like it literally shortened our timeline by five plus years in terms of getting it right.

You know, over a $100,000,000.

Yeah. A bit more than that. But

long term strategy of the company, the quality of the founders, of the people, of the product, and how much it helps from an infrastructure perspective, from a gross margin perspective, from an experience perspective. It’s probably the Instagram tour, Facebook.

No. I won’t name them. I won’t name them.

I think the ones that didn’t work were mainly the ones where we said, why not? Instead of hell yeah. So, know, they come to us and they are at the end of the line. They have some revenue. They have something that’s adjacent enough for it to be kind of relevant, but not in scope enough for me to truly care. And, you know, it’s there, so you’re like, why not? And I’ve learned a lot from this. So, you know, we get a decent amount of acquisition inbound.

If it’s not a hell yeah, I just don’t go for this anymore. And that was like a big lesson for me. And we, what I will say, we’ve always managed to make the best out of all of those acquisitions. So if it wasn’t a hell yeah, we still, most of the time, got really, really great talent out of this that shaped the company in many different ways. But now I won’t go through the struggle as much. I will just hire the person if I like them.

How quickly do you know if it’s not great? Pretty quickly. Yeah. We’re pretty aggressive on integration. I think integration, we didn’t talk about this, is the most important part of doing m and a really well. And we’ve got a team that’s really good at it, you know, combining our HR team with our corp dev team and our operations team. I think we can execute really fast on acquisitions and integrations. If there is reluctance from many parts of the business to integrate, it probably means that it was bad acquisition.

Reset the price to its real value. You know? We could have raised even more and at a higher price too. How much could you have raised that?

We’re very

opportunistic. I want the best funders to join us if we can acquihire them, and they’re really talented. We’ve been doing and, you know, there’ll be some news about this pretty soon, actually, consolidation in the market. We’re starting to see a lot of companies that raised a lot of money in our space that wanna join forces, and we’ve actually acquired one company that in The UK, a very known company in The UK in our space, and you’ll you’ll know about it pretty soon. I’d say decent chance that we’ll do a bunch of them.

You know, I wouldn’t put a specific number on this, but Like 20? Like 30? Like No. Probably in the next twenty four months, between five to 10, most likely. We’ve already done one, so, you know, nine to go.

Oh, yeah. We did. Great example. I mean, they’re a great team, and they, you know, brought us licenses in our payment infrastructure. And we’re building our payroll infrastructure, also building our payment infrastructure. They made us win two years in terms of, like, how fast we could get our structure.

Other players in the space are very nuts. I think I told you this before, but when we raised our series a, and maybe you can ask Anish about this, we had raised $4,300,000 in our seed round. We showed up to our series a pitch meeting with Andreessen’s team, having burn knifing 400 k a year and a half later. So what I’m trying to say here is as a funding principle, we’ve always favored sustainable growth. What’s important for me is for the business to be sustainable over growth.

And then if we can grow as well, amazing. And the reason for that is if I’m a company in HR and I’m burning $300,000,000 a year as a customer, I really would want to put my team on that platform because the uncertainties behind it is pretty big. Right? And for for me, what’s most important is to have a long term partner that can really scale with me. You know, one thing that’s interesting in our go to market is as we grew, we started signing like four or five years deals, right, or even seven years deals because payroll is something super stable, something you invest in, not something you change every year.

Right? It’s not the type of software that you wanna change on a yearly basis. Being able to show super strong financials where you’re like, hey. We’re 17% EBITDA. We’re generating profit. We’ve been generating profit for three years. It’s such a strong signal that you can build with us in the future and for the long term. So it may it made sense for us.

I think that YC founders are more and more international, and they move to the Bay Area. So by design, I think a lot of them understand the value of deals straight away and wanna hire from back home. But the truth is now we do everything. We do US payroll, we do HR, we’re kinda like the full stack solution for early stage founders as well. So I think our market share there is pretty high.

12 is a bit short. Give me a bit more time.

No. It’s more. There’s, like, SOX compliance infrastructure. There’s some leadership hires we need to have in place in order to be able to go out. There’s there’s things to be done there. And my take is you wanna have, like, four or five clean quarters with your exec team before you go public as well. Right? So there’s a couple different things at play here.

I think it’s just about being ready. Like, if our infrastructure is ready, if our compliance is ready, if our leadership team is ready, which I’m just reiterating from my last answer, then, you know, we’ll consider going out. That’s kind of our plan.

I think that as long as I’m the best person to run this business, no matter whether it’s public or private, I would like to be the one running it.

I love working with my dad. Honestly, not a lot of negative things. With working with my dad, I think the best thing is wholeheartedly trust him. And he’s able to drive a lot of decisions in a way that comes with experience that I don’t have. I’d say if you want to say one negative thing is like a lot of people have a strong misconception of working with family, at least in The United States, which was like a little weird to me. But most of the people that know us very well, they understand the dynamics between the two of us and and how we work.

And the closer you are to us, the more you understand how valuable the relationship really is.

The hierarchy is thankfully, my dad kinda looks at the business and understands that I’m leading it and allows me to despite sometimes his very strong opinions, allows me to make the mistakes that I wanna make.

Many times. Actually, we disagreed all the time. He hates that story. But the biggest thing he disagreed on with me, which actually was the best decision we ever made as a company, was building up our infrastructure for our employer of record product. Basically, way employer of record work is we enable you as a company to be able to hire anyone anywhere without having a local entity. We have local entities all around the world and we employ people on your behalf. As a more risk averse person and, you know, an acting CFO at the time looked at the business and told us, hey, if you actually own the infrastructure, you take on so much liability.

Let’s work with partners, which was how the old school model was. And at the beginning, I pushed back and I said, you know, partners, they work on Windows Vista. They don’t have the same care for customers. They don’t understand service the way I think about service, the way you think about service, which is, you know, service of today. It’s not gonna work. And when your CFO says like too much risk, you’re like, okay, we’ll try. We tried for two months. And then I came back and I said, open the entities, which he pushed back on until he decided not to.

And today, employer of record product generates, I think, over $2,530,000,000 dollars a month. Right? So best decision for the business ever.

Yeah, dad. I love the way you chose the one that worked out perfectly well in your favor. Yeah.

Yeah. Yeah. The the good thing is everybody is super aligned. Just We want the best for the business, the best for our shareholders, the best for our employees. Having people that you can look at in the eye and tell the truth at because any way you trust each other is a huge advantage. And by the way, like, people don’t realize that Shuo, my co founder, is like my sister, you know. It’s I have three sisters, so wouldn’t say the sister that never had, but she’s the my fourth sister in many way.

And, you know, a lot of people like to think about funding companies with people as marriage. I think about a bit more as family for the sake of my wife being happy. And, you know, I think this type of relationship are super critical, and the more trust you can establish, the better. And if it’s trust that was given by nature, even better. If not, you know, you need to build that type of trust over time.

I’ve really changed my mind on being much more prepared across different topics. So we had policy situations, litigations, like PR. Right? Like and I think a lot of those things there showed and exposed a lot of things in the company that we hadn’t thought about. Right? Like, I don’t exactly wake up thinking, we need to be really strong at policy, or or we need to be really strong at litigation. So we’re much more prepared, and we’re consistently thinking about where do we need to reinforce ourself, which is external to purely product and customers experience, which maybe we didn’t do as much before.

I like fighting people in product and go to market. I want you to kick my ass because you build a better product. But I’m I’m gonna give you a round up for your money because I’m pretty decent at building good products. So I love the fight when it comes to fighting through who is gonna serve our customer better. And I think there’s some amazing companies in our space building that way, and all of the money that flew into this space and the quality of the people that we have just makes it a super, super interesting fight.

Other fights, just not my style. I’m not a very litigious person.

How would you have liked Rippling to behave?

Well, I think you should read our lawsuit in Delaware. Three years of a poor way of competing in the market. You should have a read. A lot of those things are tied to old stories and old demons, and we’re in the crossroad, but it’s okay. You know, it’s not deterring us, and we’re able to perform for our customers. So it’s all that matters.

Yes. He was one of the most underrated founders I ever knew, and then the guy just turned the heat around like fucking crazy. And he’s now one of the most hyped companies

in the world. So you know what? I’ve actually learned to love two founders that I think are some of the most underrated funders in the world. And I think the the companies are amazing, and everything they’ll touch in the future will be just as amazing. I don’t know if you know them, but the first one is Johannes from Cree.

the one of the most underrated founder I’ve met. Why do you say that with him? I think he’s the right mix of clear thinker, first principle, and at the same time, relentless. He’s got that, like, hands on fire that someone that has built a 4,000 plus people company usually loses. And on the same spirit, I don’t know if you know Fred from VOY, but those two guy I’ve I’ve been falling in love with Swedish tech recently. I think a lot of people have, but I’ve been I’ve been falling in love for the last few years.

And those are two of the people that I’ve met that I know are gonna either take those companies to huge numbers or build new businesses that are gonna be significant.

I think the mentality of the founder there is really good. Good people, honest people that truly care about building great companies and great product. There are those tall giants that are sweet at the same time. They’re in an ecosystem where, like, it reminds me in many ways of the Israeli ecosystem where it’s a very tight knit community. If you look at this the successful Swedish founders as well, right, like the Claranas of the world or the Spotify’s of the world, like, Daniel, they kind of paved the way for those founders to be able to build great companies, and I think they’ve really capitalized on this in a way that no one has before.

For sure. But I think they’re gonna have very long carriers.

Well, he’s gonna love this. I really, really love Alfred Lin from Sequoia. He’s gonna be sad about that one. He passed on my seed round when I had no idea what I was doing. Me and Shuo met him in a coffee shop during or right after YC. And I’ve just learned to know him over the years and just like, I actually think he’s one of the best investor in the world. So Why? He cares about funders in a way that’s very rare, and he understands the businesses a lot more deeply than a lot of board members want to.

And I saw that first hand right there. I mean, Alfred is on the board of Cauchy, and Tarek is a very close friend. And I think the impact Alfred has had on the business is very significant. Same thing for DoorDash and others. I think he’s the right mix of sweet, sharp, and well advised person that has seen things before. And I think he was an operator before as well. Can I ask you why do you not have Sequoia on the cap table then? Ask him, not me.

Sadly, they invested in every competitor you can think of. I have a great relationship with the team. Honestly, I think Do you mind investors doing competitive

Not as much as I used to. Obviously, if you’re investing in a competitor that I care about, right, then I cannot share as much as I can I used to share with you? But I’ve grown too careless. And in that specific case, you know, I have a great relationship with the with the Sequoia team. I think Rolut, Sean, Julian, like, all of those guys are are amazing. And like, you know, I I get to work with them in different ways. But if you ask me, like, you know, who would I have wanted on the cap table that I don’t have today, it’s definitely them and it’s probably definitely Alfred.

way I think about our business, which a lot of people find super boring, I actually think this is why you passed. Not because you don’t think there’s a lot of potential into payroll, but because you think it’s a boring business. I don’t think it’s boring because the way I think about this, and this is what like really drives me. Right? When I think about payroll, HR, I think about like such significant moment in the life of people. It’s where you get your paycheck. It’s where you get your your payslips, your mortgage letter, your business visa, your payments.

Right? It’s where you submit your expenses. So it’s like a place that you interact with all the time in like very unique key moments and events in your life. And it’s like super disregarded. Right? I’ve never had someone come up to me and tell me I fucking love my payroll software. It’s the best thing I’ve ever used. Right? And I’m like, when you’re in such critical moments of the life cycle of people, right, new jobs, like uncertainty, you can build such a strong relationship with your end users if you actually care to invest into their the relationship you have there.

And you can create, going back to brand awareness, I think a very, very strong brand where hopefully one day people will tell you, oh, I fucking love my payroll software. Deel is the place I wanna be hired on, is the place I wanna be paid. That gets me excited. Right? Like building the first truly global brand that you love as an end user to get paid on and that really shares your value and understands your moments is like what in the long term of the business gets me excited.

Oh, I think well, she’s older than mine, so it’s a it’s a bit tougher to say. My baby is three months old. You’ve only got one? Yeah. I’ve only

got one. It’s my first baby. So it’s been a very fun year, as you can as you can realize. Have

Not yet. My my parents and my wife’s parents are super helpful. She’s so little. I wanna spend time with her. That’s the perk of remote work. She you know, I’m I’m seeing her truly grow up, which is very unique, and I I very value this in a way that most people can’t understand. But You do secondary so you can have a night nanny.

Well, I maybe without jinxing it, I think my my daughter realized the nanny thing was not gonna happen for now, so she decided to sleep through the night. But, no, look, we were very lucky that, you know, my wife has a nice mad leave policy and we’re able to be with her and she’s three months old. She’s like changed how I view the word in many different ways. And she definitely is a very life changing moment. I never realized what people really meant by this, but in the back of your head, it’s like the thinking about the small moments you’re gonna get to spend with her is a big deal.

So I think your brother probably would have tips for me more than the opposite, But the one thing I would say is, like, this is where remote work actually shines. Right? Like, actually, you get to see her every day and a lot more, I think, than the average dad.

thank thank you so much for taking the time. And by the way, think you’re the first podcast I do in a while, so I don’t know if that means that I’m back to less working, but I don’t think so.