Six months after joining the billion-dollar Unicorn club, Israeli startup Deel closes a massive, and somewhat abnormal, $425 million Series D funding round at a $5.5 billion valuation. The investment was led by Coatue (previously invested in Spotify, TikTok, Shopify, and Snap), with participation from YC Continuity (Y Combinator’s growth fund), Andreessen Horowitz, Spark Capital, Neo, and Greenbay Ventures. In addition, 40 founders and CEOs from around the world also got in on the action.

Payroll in a click

The Deel system helps businesses with a distributed workforce or that employ suppliers from around the world, simplify financial related business processes, including payroll, the global tax regulatory minefield, and automate compliance under one platform. The employer can choose to pay salaries by credit card, bank transfer, PayPal or ACH systems, while employees are free to decide if they want the money to go straight into their bank or PayPal account. Employers can effortlessly pay bills at the swipe of a screen, or even create bonuses based on milestones for the sales team.

The highly caffeinated startup

While most of us may remember 2020 and 2021 as cursed, Deel was cooking up some memories. In May 2020, the company announced a $14 million investment from Andreessen Horowitz. Just 4 months later, Deel raised another $30 million, this time from Spark, Andreessen Horowitz, YC, CEO of GitHub, the founder of Reddit, and others. Not too long after, in April of 2021, Deel became the fastest Israeli company to reach Unicorn status, with a humble but substantial $156 million round at over a billion dollar valuation. Fast forward four months later, Deel starts putting the capital to use, acquiring Israeli startup Zeitgold, which develops a system that automates tax compliance and connects small business owners with relevant accountants.

Deel was founded in 2018 by CEO Alex Bouaziz and Shuo Wang, and participated in the elite startup accelerator, Y Combinator. Deel reports over 4,500 paying customers, including companies like Dropbox, Coinbase, Shopify, and others. The company currently has 400 employees, with 30 based in Israel, all working remotely from 47 different countries, with the entirety of them receiving payment through the Deel system. Deel has raised $630 million to date, and plans to use the capital for new product launches, including features for creating APIs and contracts on its platform. Additionally, the company claims that there will be more acquisitions on the way.

Deel's founding duo credit: Deel

However, Deel's funding round comes at an interesting time when technology companies in Israel and around the world have begun returning to their offices and back to the ways of old (until the next COVID wave). When I ask Philippe Bouaziz, Deel’s CFO (and the father of CEO Alex Boaziz), whether the company's development will still be relevant in the more distant future -- he argues that not only is the world of work continuing to change, but many companies have come to the conclusion that identical or higher achievements can be reached just as easy through remote work, and they understand that they should not be limited strictly by what the local workforce offers: “They (the companies) realized that it’s also possible to recruit candidates remotely and enjoy people with unique expertise or employee presence through all the different time zones around the globe. These two trends are only getting stronger. "