Payroll and HR technology firm Deel reported a US$1 billion annual revenue run rate in Q1 2025, with 75% year-on-year revenue growth and a 16% EBITDA margin.

Founded in 2019 by Alex Bouaziz, the company has been profitable since late 2023 and has not raised external funding since 2022.

Deel serves over 35,000 customers and 1.25 million workers across more than 150 countries, offering payroll, HRIS, compliance, IT asset management, and employee benefits.

The company has allocated up to US$500 million for acquisitions in 2025 and recently acquired the payroll division of Safeguard Global. It is exploring further mergers and acquisitions this year.

Deel plans an IPO in 2026, depending on market conditions.

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🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Deel’s growth reflects the permanent shift toward distributed work

Deel’s rise to $1 billion in revenue coincides with a fundamental transformation in global workforce management that extends far beyond the pandemic.

Recent data shows that 40% of jobs now feature some remote work component, creating sustained demand for platforms that can manage distributed teams 1.

This trend is particularly pronounced at senior levels, where remote work options have become an expected benefit rather than a perk, forcing companies to adopt tools that facilitate global hiring and compliance 2.

The timing of Deel’s founding in 2019, just before the pandemic, positioned it perfectly to capitalize on this shift, as 74% of companies now plan to maintain remote work options permanently 3.

Unlike temporary pandemic accommodations, this represents a structural change in how global talent is deployed, with HR leaders increasingly seeking unified platforms that can handle the complexity of international employment.

2️⃣ HR tech competition intensifies with high-stakes legal battles

The lawsuit between Deel and Rippling reveals the increasingly contentious nature of competition in the HR technology sector as the market consolidates around dominant players.

Rippling’s allegations of corporate espionage, including claims that Deel cultivated a “mole” within their organization, show how valuable proprietary information has become in this fast-growing market 4.

Deel’s countersuit claiming defamation suggests that reputation management has become critical as companies compete for enterprise clients, with legal experts estimating that each company could spend over $5 million on litigation alone 5.

This level of legal conflict is significant given that both companies are preparing for potential public offerings, with investors closely watching how these disputes might impact valuations and market position.

The intensity of this rivalry highlights the immense value at stake in the global HR tech market, where winning enterprise contracts for distributed workforce management can translate to hundreds of millions in recurring revenue.

3️⃣ Profitable growth emerges as the new standard for HR tech leaders

Deel’s combination of 75% year-on-year growth while maintaining profitability since late 2023 represents a significant departure from the “growth at all costs” model that dominated the 2010s tech boom.

The company’s 16% EBITDA margin demonstrates that it has achieved the difficult balance of rapid expansion and fiscal discipline at a time when investor expectations have shifted dramatically toward sustainable business models [original article].

This approach contrasts with many venture-backed HR tech companies that prioritized market share over profitability, only to face challenging fundraising environments when market conditions tightened.

Deel’s substantial acquisition budget of $200-500 million for 2025, funded from operations rather than new capital raises, exemplifies this new model of expansion through strategic purchases rather than purely organic growth [original article].

This strategy of acquiring complementary assets, as seen in their recent purchase of Safeguard Global’s payroll division, allows established players to consolidate market share while maintaining financial discipline—a playbook that more tech companies are likely to follow in the current economic climate.

Recent Deel developments

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