We are excited to welcome Deel to the Spark family as the lead investor in their $30M Series B fundraise and join our friends at a16z on the board.
Alex and Shuo, Deel’s co-founders, envisioned a world where talent sees no borders long before COVID made remote work an inescapable necessity. Deel has created a platform that enables businesses to legally and compliantly hire anyone from anywhere in the world — and administer employment, taxes, benefits and payroll from a single dashboard. Deel’s customers describe working with Deel as “a magical experience” — indeed being able to seamlessly and cost-effectively hire and pay an engineer from Estonia, a designer from Argentina from a single platform sounded like magic to us at Spark too.
Hiring talent and managing payroll globally is still a gruesome effort, requiring ceaseless time and dollars spent navigating a web of international labor laws through various third-party consultants and counsels. While Slack, Zoom and various note-taking apps are often cited as enablers of remote work, in reality compliant hiring of remote talent is the largest barrier to embracing a partial or fully distributed global workforce today. With that lens, Deel is the “picks and shovels” that allows companies of all sizes to build a distributed workforce and, arguably, the true enabler of remote work.
Without Deel, companies would have to pursue the cumbersome path of opening legal entities in each country they wish to hire from. This option is unscalable and heavily disadvantages smaller companies who do not have the in-house expertise, time or budget to embark on this journey. Alternatively, companies could rely on Professional Employee Organizations (PEOs) as middle-men who hire employees on their behalf and charge a handsome percentage of payroll as fees. The PEO path is not only extremely expensive, it often leaves companies managing an array of independent PEO relationships based on the various regions they are hiring from. Deel is the only platform that helps HR teams hire a global workforce compliantly and at a fraction of the cost of the alternatives. However, Deel’s ambitions do not stop at creating a seamless platform for HR teams to hire, manage and pay their global workforce. The company is already leveraging their unique relationship with the end employee — as the provider of their payroll — and launching a portfolio of financial services products, such as universal health insurance, directly offered through the Deel platform. Overtime, Deel will offer remote workers the health and financial benefits that employers have traditionally only been able to offer to their domestic employee base.
Up until 2020 remote work was the exception and many companies took a headquartered centric approach to building their team, culture and processes. The post COVID world will look nothing like the one before it. Five months into shelter-in-place, the notion of a physical headquarters seems increasingly inessential for driving high output. Embracing a full or a partially remote workforce is a win-win for both the employer and the employee. Employers win by expanding their geographical reach for talent and potentially better managing payroll and general and administrative related expenses, and employees win back squandered commute times and flexibility in lifestyle.
The benefits of remote work are becoming apparent to companies of all sizes across the globe. No surprise, Deel has been growing incredibly quickly. In a short amount of time, they have scaled to serving over 500 companies and thousands of their employees in 140+ countries. We believe that Deel is well on its way to becoming a defining enabler for a remote-friendly world. The entire Spark partnership and I are thrilled to join Alex, Shuo and the Deel team on this journey. (Lots of cool job openings at Deel!)