We've often heard tech companies talk about product market fit. But have you heard about product founder fit? It refers to the founders' deep personal connection and understanding of the problem that a company is trying to solve. This very philosophy forms the foundation of Deel, an HR services platform which has emerged as one of the fastest growing enterprise SaaS companies globally.
I'm from France originally. I lived around the world. I knew that there was amazing people all over the world that could thrive in amazing companies. They just weren't living in Silicon Valley or in Mountain View. So, understanding the problem at a very deep level helped us get the best out of the product really fast in the hands of our users.
That was Alex Bouaziz, co-founder and CEO of Deel, who started the company 6 years ago with his co-founder Shu Wong to solve the problem for global talent sourcing. Since then, the company has pivoted to many services which includes end-to-end payroll management, compliance services and employer of record services that allows companies to hire anywhere without setting up local entities. Today Deel competes with the likes of ADP, Rippling, Darinbox and Zoho. It crossed 1 billion in annual recurring revenue this year and serves over 40,000 customers in nearly 150 countries. All of this while being a remote first company. In its series E fundraising round last October, Deel was valued at 17 billion. I spoke to Alex on the company's growth story, fundraising, remote first work culture, and the latest hiring trends. This is the latest episode of our special series ET in the Valley. It's Wednesday, the 24th of December. I'm your host, Himanshi Lochub, and this is the Morning Brief.
So, Alex, I want to start with the backstory of how you founded Deel back in 2019. How did you envision a product idea like that?
Deel started about 6 years ago now. The main idea was there's amazing people all around the world. How can we help companies have the right infrastructure and the right setup so that they can hire them and give them great opportunities? Since then, it's been a fun journey. We've crossed over a billion plus in ARR. We serve almost 40,000 plus customers. We even recently raised a round at over 17 billion dollars valuation. But what's even more exciting is how we're going to deploy this capital and all the things that we can bring to our customers, from M&As to new fintech products to more infrastructure. There's a lot that we have in store.
Do you want to share any interesting moments or challenges that you faced during your journey of building this company?
Well, so many, right? We went through an accelerator at the time called Y Combinator with just an idea and since then it's been a roller coaster of emotion. One thing people love to chat about is very early on, we changed ideas many many times because we weren't sure what was best and what we should focus on. One interesting fact that maybe the audience will like is what I've learned as a founder: the most important part is working on something that you really understand. I like to call this product founder fit. I mean by that something that you have a very strong understanding of, a very strong personal connection to. For example, in the case of Deel, I'm from France originally. I lived around the world. I knew that there were amazing people all over the world that could thrive in amazing companies. They just weren't living in Silicon Valley or in Mountain View, so they didn't have the right opportunities. But a lot of my friends from engineering school, I knew how talented they were. So understanding the problem at a very deep level helped me focus on the customer and really helped us get the best out of the product really fast in the hands of our users.
Can you explain a little bit more about your philosophy of founder product fit?
I think minded people and engineers can solve every problem assuming it's not rocket science or very complicated technical problems where you need expertise. But when you're running a company, you're in for a very long journey. So what I found is if you want to really solve for your customers' best interests and have that customer obsession, you need to at a personal level feel very attached to the problem. That's also how in the long term you stay focused. Deel is now six years old. It's been a crazy journey and crazy journeys are very intense, they take a toll on people. But when you're so driven by the mission and by the product and the market, and there's a very strong fit between you and what you're doing, you can really move mountains. That's one of the reasons we've been thriving at Deel. When I think about the impact of what we're doing, when I think about how I would have wished that Deel existed when I came out of school, that's what really drives us, and that customer obsession is very much reinforced by it.
That's really a very interesting concept I've heard, and it's really worked for Deel. Congratulations on that. So, Alex, now that the company is valued at almost 17 billion, your ARR has reached 1 billion, you're present in almost 150 countries. Tell us what is the future growth story. Where do we go from here? How do you plan to use the funds? Are you exploring M&As?
I think we're very much at the beginning of Deel. We went from being a company with two products, helping companies hire people abroad, all the way to now helping companies with the end-to-end HR and payroll system from performance, learning all the way to helping you set up an entity in a country and running all of your payroll in one system, whether it's in the US, India, Japan, wherever that might be. Investing in our infrastructure: we own 55 payroll engines, planning to go to 100 payroll engines, actually even launching our own engine in India next year. We're applying these funds into the experience of the customers, whether it's the end user or the companies using the platform. M&A is a big topic for us. We've done 13 M&As, mainly a mix of technological acquisitions and business acquisitions, and we've always been very opportunistic for a young company. It's not that common. We'll probably do more. HR and payroll is an amazing huge market that is right for disruption, for automation, for AI, and for a huge focus on customers.
And you touched upon India, and I wanted to come to that. Can you tell us what does Deel's India story look like and how are you planning to expand here?
India is a key market for Deel. From a pure go-to-market standpoint, so many companies love hiring in India because of how amazing the talent pool is there. Generally for Deel, apart from that, we actually have ourselves a thousand people in India right across the country. So it's definitely a super important market for us, and we envision that over the next few years it's going to become one of the most critical markets for Deel. We also support amazing companies in the market: if you look at companies like Paytm, Ola, or for example Mahindra, they're amazing businesses ready for growth. So it's not just about companies looking to expand into India, it's also to help companies in India thrive around the world.
Tell me where is the demand mostly coming from? I mean, IT and GCCs are expanding widely in India, but there's also demand for cross-border hiring especially for tech talent. What is your view?
Deel as a company was more of a platform to help you hire talent around the world. That usually biased our users to be more on the tech and IT side. We actually see the full payroll of companies end to end and where they're hiring and what they're thinking. Generally, most of the customers that are hiring today in India are still thinking about tech first and IT and maybe some of the back office processing that they're working through. But the type of talent we're seeing, whether it's AI talent, there are so many Indian founders moving to the Valley but actually even coming back to India to build great businesses, and we're so excited to see this as well.
