The San Francisco-based HR technology firm Deel is on a rapid acquisition trajectory, announcing on Tuesday that it is acquiring the African-based payroll and HR software and services company PaySpace. This transaction marks Deel’s largest acquisition to date, significantly enhancing its global capabilities. The move comes swiftly after Deel’s announcement last week that it had picked up Munich-based Zavvy, an AI-powered “people development” startup that builds tools for personalized career progression, training, and advanced performance management.
The exact financial terms related to the PaySpace acquisition were not disclosed by either company.
Africa-based PaySpace serves over 14,000 customers using its specialized software and services across 44 countries, including prominent markets in Africa, Europe, Latin America, and the Middle East. Its impressive roster of clients includes major multinational corporations such as Heineken, Coca-Cola Beverages, and Puma Sports SA. For Deel, a $12 billion HR startup that already facilitates talent hiring, payment, and management in over 70 countries, the acquisition is a pivotal opportunity to dramatically strengthen its technological and operational footprint within the diverse African market.
Although PaySpace secured some undisclosed financing last year from Netcash, a payments solutions provider, the company does not fit the typical profile of a venture-backed startup. It is fundamentally a self-funded, or “bootstrapped,” success story. PaySpace was founded in 2007 by the Clark brothers, Bruce, Clyde, and Warren, along with George Karageorgiades. Their initial aim was to create a modern, cloud-based payroll and HR platform to simplify the complex and laborious payroll runs and backup procedures associated with the traditional, legacy HR software prevalent at the time. The company quickly gained momentum, expanding its product reach to 11 countries within three years and extending that footprint to 43 countries by 2022. That year, company executives announced specific plans to further expand into Brazil and the U.K. Sales for the 18-year-old company have been growing at an aggressive rate of over 30% annually, according to managing director Sandra Crous, servicing a wide clientele from one-person shops to major global enterprises.
Separately, San Francisco-based Deel also proudly revealed on Tuesday that its Annual Recurring Revenue (ARR) has organically surpassed the $500 million milestone, achieving this figure outside of any revenue contribution from the recent acquisition. This rapid growth is substantial, marking a jump from $290 million ARR reported at the close of 2022. Deel also confirms it has been profitable on an EBITDA basis since September 2022 and maintains a significant $600 million in cash reserves. While an IPO remains a key goal, Deel CEO and co-founder Alex Bouaziz indicated the public offering is likely targeted for the 2025/2026 timeframe.
This news follows Deel’s prior acquisition of the APAC payroll provider PayGroup, underscoring a continuous strategy of buying key technologies. With these various strategic acquisitions, Deel claims it now owns the full HR stack—including local payroll engines, entities, and in-country teams—across six continents. Bouaziz noted that PaySpace alone built 45 native payroll engines over the last 15 years. Deel’s ambitious four-year goal is to serve 100 countries with its own native payroll engines, solidifying its global dominance.
“We were actually their customer, running payroll in 10 countries using PaySpace,” Bouaziz stated. “Our internal team was desperately keen to acquire them so we could integrate the ability to do complex on-the-spot calculations. Theirs is genuinely one of the best technologies we’ve ever seen for this purpose. We had to do a lot of convincing and negotiation to finally secure the deal.” PaySpace director Clyde van Wyk confirmed the strategic alignment, noting that both companies share a commitment to disruption.
Deel now owns over 150 global entities and manages in-house, in-country payroll teams in more than 70 countries, in addition to offering comprehensive employer of record, contractor, immigration, HRIS, and performance management services. The ability to now own more than 50 native payroll engines, up from just two, is a massive technological advantage that eliminates reliance on third-party software for tax and salary calculations. Furthermore, Deel is aggressively expanding its focus on the lucrative enterprise segment, an area where PaySpace, with its existing multinational client list, is expected to provide significant acceleration. The combined client list will substantially grow Deel’s total customer count beyond its prior 25,000 customers, which included major firms like Klarna, Shopify, and Hermès.
Beyond the corporate specifics, this acquisition highlights a crucial trend that has accelerated over the past 18 months: this is now the third major acquisition involving an African-founded company being bought by a major global counterpart. Last January, German vaccine manufacturer BioNTech acquired the London-headquartered AI startup InstaDeep, which originated in Tunisia, for up to £562 million. In June, private equity firm Medius bought Expensya, an expense management startup headquartered in Tunis and Paris, for over $100 million. Even earlier, in 2020, Stripe famously acquired Paystack, a successful startup based out of Lagos, Nigeria, providing a rapid way to integrate payments services.
