“The war for talent is raging more than ever before,” says Dennis Valkema, Benelux Leader of Deel, while also speaking about the current economic situation.
Last month, Deel confirmed its latest funding round at a $12B valuation last month. The modest round was primarily to bring Emerson Collective onto the cap table.
Founded in 2019 by Alex Bouaziz and Shuo Wang as the employer of record, Deel now wants to be the HR backbone of its customers. It began 2021 with $4M in ARR but the number has surged to $295M in 2022.
It has also announced being profitable based on Ebitda since September 2022 with operating margins of 85 per cent. Deel certainly has metrics on its side as it shifts focus to Benelux expansion.
A full-stack HR solution
Deel began as a fintech startup, but has now morphed into a HR tech startup. It is a great example of how classifying startups to a field is not relevant anymore.
Valkema says it is still important for Deel to enable global hiring with international payroll and compliance. “However, it is not enough when managing a global team,” he quickly adds.
With Deel HR, Valkema says they are simplifying local payroll, culture, and onboarding into a simplified full-stack HR solution.
For international team management alone, most teams use up to 16 different tools. With its full-stack solution, Deel sees a way to help companies do away with data silos.
Deel now offers four main products:
- Onboarding: Helps set up EOR for employees or contractors, compliantly anywhere in the world
- Payroll: Supports paying teams with a fast and easy solution in one or many countries
- Mobility: Support teams regardless of their location
- Deel HR: a simplified HR solution for the whole team
Valkema says, “Deel is the only global-first HR platform providing businesses with everything they need to compliantly manage their entire workforce, from direct employees to international workers and everything in between.”
Deel’s biggest selling point is that its services are free for businesses with less than 200 employees.
As an all-in-one HR platform for global teams, it is now armed to challenge other HR unicorns like Rippling and Gusto.
Benelux for growth
Even as investors focus more on due diligence and less on writing cheques, Deel remains a hyper growth story.
While the company is not disclosing revenue from individual markets, Valkema says the “Benelux region has proven to be one of the primary growth regions.”
Today, we’re launching @Deel’s biggest product ever. So we wanted to look back at 2022 where we learned & improved by helping the world’s biggest brands scale their global teams:
— Alex Bouaziz (@Bouazizalex) January 23, 2023
???? $57m -> $295m ARR
???? EBITDA positive since Sept
???? 85%+ Gross Margin
???? $5B+ paid to 250k+ people
The startup has been actively present in the Dutch market since the middle of last year and expanded to Belgium and Luxembourg at the end of last year. For Deel, both the markets are potential growth opportunities and Valkema acknowledges seeing “great traction.”
However, this expansion comes with the challenge of Deel being relatively unknown in the HR space. Valkema says his focus for 2023 is to find a balance between the speed at which they develop and the Benelux HR landscape.
He also wants to focus on how Deel is seen by the HR professionals in the Benelux.
With the startup and scaleup ecosystem developing rapidly, Deel could become the difference between traditional and new ways of working and hiring.
“In the Benelux we are currently focused on localisation, on building the brand,” says Valkema. “Over the year, you’re going to see a lot more of us, both online and offline.”
Valkema, who has over 25 years of experience in the HR and talent management space, wants to focus on the basics as its expansion journey gets started.
“The HR tech market is competitive, with a lot of flavours but all based on the same recipe,” he says.
In this competitive market, he wants Deel to be the equivalent of a best-selling cookbook. He wants to focus on helping Benelux customers learn about all of its features and understand how Deel can help them grow and scale internationally.
Uncertainty becomes opportunity
One of the biggest trends in the tech industry right now is companies slashing jobs and reworking their cost structure.
Valkema sees this as an opportunity as companies look to keep their talent or consolidate their workforce. He says the future of work will be one where employees not only find their voice but also raise it.
He says, “The younger generations want the freedom to work whenever they want, from wherever they want, whilst maintaining the trust from their employer that they’ll still perform.”
For him, the value of a service like Deel comes into play in this new macro-economic environment where most companies are manageably slowing down their growth.
He says the talent impacted by layoffs will find opportunities within the same startup and scaleup ecosystem in no time. This, according to him, will boost and strengthen the holistic ecosystem.
Valkema sees booming mergers and acquisitions in the changed macro-economic environment. “[This will] lead to demand for unified administration and payments,” he explains.
With Deel HR, the startup is trying to tap into this very market by offering a singular platform for compliance, global payroll, and taxes.
He believes companies will realise their option to decrease their operational cost without letting go of their workforce. “Closing down entities and offices, but retaining the talent in satellite geos by moving them to employee of record (EOR),” he describes the option.
Deel sees businesses increasingly looking to hire more talent from abroad rather than domestically to further optimise their costs. “Amazing talent isn’t confined to country borders,” says Valkema and adds that the HR startup is on track for month-on-month growth despite broader economic slowdown.
A HR platform for modern workforce
Valkema wants to hone in on the fact that the traditional method of hiring and working is replaced for good.
He says today’s workforce wants more flexibility and the internet has made the globalisation of the labour market possible.
“Talent is everywhere, but opportunity is not, and finding your dream job shouldn’t be limited by location,” he says with profound confidence about the job market.
As an industry veteran, he has seen the hiring industry evolve into the current landscape where work is going global and businesses hiring people distributed all over the world.
For him, there is no other HR platform built with this remote-first, work from anywhere workforce in mind.
With Deel HR, he says they have solved this puzzle of creating an HR solution that “meets the evolving needs of global teams in a constantly changing world.”
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