Every week, 5 billion people around the world are paid via payroll systems. That process — getting people hired and paid for their work — should be straightforward, consistent, and seamless. Depending where you live and the work you do, however, that presumption is far from reality.
From the outset, Deel cofounders Alex Bouaziz and Shuo Wang had a global vision: Anyone qualified should be able to work at any company without burdensome hoops and delay, no matter their location. With ambitions to create the universal payroll rails of the world — akin to SWIFT’s transformation of payments in the ‘70s — Deel is working to become a foundational layer for global businesses. Since being founded in 2019, the company has grown from a simple EOR business to offer horizontally and vertically integrated global payroll, HR, finance, compliance, mobility, and IT support wrapped in one platform: a global operating system for work. Unlike incumbents that rely on manual processes for payroll, Deel delivers the entire payroll stack through software, eliminating the need for humans in the loop. This catch-all quality is by design. Deel doesn’t sell a cookie-cutter bundle; it gives clients ranging from Instacart to OpenAI the specific services and integration they need, across 150 countries.
At a16z, we’re always searching for repeatable lessons to share with aspiring entrepreneurs. Because Deel’s approach to product and business strategy have often run counter to conventional Silicon Valley wisdom, the company makes an interesting case study.
This post goes under the hood (and into the spreadsheets) of Deel to help guide the culture and business strategy of other startups. We spoke to nine leaders spanning every facet of Deel’s business, from its CEO and CFO to its heads of product, growth, revenue, and marketing. Below, we unpack the tactics and cultural tenets that have fueled Deel’s ascent. But first, the problem:
The challenge of employing a global workforce
Hiring and paying workers in various countries has long been a hassle, hindering the velocity and taxing the logistical resources of global businesses (and those that aspire to be). Historically, companies have settled for a patchwork of local vendors in each country, making it difficult to manage and reconcile payroll across geographies. Even large vendors like ADP and SAP rely on a network of outsourced third parties on the back-end, which requires human payroll managers in the loop for every pay cycle.
Deel is consolidating this fragmented manual business into automated software, modernizing the underlying rails in the process. Bouaziz and Wang founded the company on the belief that automation could standardize the complicated, surprisingly brittle business of payroll, providing the same level of accuracy, reliability, and flexibility to employees anywhere in the world.
In 2019, the pair started Deel as a global contractor platform, facilitating all payments for international workers in one place. Their employer of record (EOR) service — initially an experiment launched in Canada and the UK at the request of a client — allowed companies to quickly and compliantly hire workers around the world, without setting up their own local entities. As workforces became increasingly distributed during COVID, the demand for Deel’s first two products exploded. But the shift wasn’t just a temporary response to the pandemic, it was structural. Bouaziz and Wang saw that the move to a default-global workforce was an inevitable transformation — one that modern software, and eventually, universal payroll rails, would accelerate.
In 2022, Deel expanded into global payroll, allowing companies to pay employees around the world. In contrast to incumbent competitors, Deel built an end-to-end service, from the payroll engine to the application layer.
How did they achieve this? Five key factors: vertical integration, modularity, acquisition, speed, and automation.
Deel’s growth strategy
1) Vertical integration: Speed + depth + accuracy
“Unless we own every inch of the chain, we cannot deliver on our promise to the client.” —Aaron Goldsmid, Deel head of product
The majority of Deel’s competitors rely on a patchwork of third-party partners, from boutique accounting firms to payroll in-country partners. This reliance on third parties is common across the startup ecosystem. Why not outsource a task considered onerous, like compliance, or viewed as a commodity to focus your limited resources on iterating quickly at the application layer? Bouaziz and Wang decided early on that to reach scale without sacrificing speed and customer responsiveness, they’d need to build and own the full stack.
This realization — that vertical integration could unlock a truly differentiated product — is something numerous successful startups have learned over time. Dropbox, for example, was originally built on AWS before shifting to their own cloud infrastructure. And Amazon relied on third party logistics providers before building their own fulfillment network.
This model results in a far more responsive and reliable product for customers. It means Deel can pinpoint and diagnose a payroll error or rejection in real time. And with fewer hand-offs across the payroll process, Deel exerts greater control over SLAs and quality standards. Clients can tailor their payroll calendars and request on-demand payroll and correction cycles to fit their needs, rather than rigid bi-weekly timelines. “Right now, enterprise clients are asking: ‘Can you integrate with my existing systems?’” says Meltem Kuran Berkowitz, Deel’s head of growth. “If yes, then: ‘Can you replace my existing systems?’” In 2024, for example, Klarna replaced Workday with Deel’s HRIS and payroll service, which provides a single control center for its global workforce.
In addition, the full-stack model provides greater oversight, flexibility, and customization. Changes in local regulations around the globe are continuously registered and comprehensively reflected throughout the Deel stack in real time, from communicating the change to the client, to notifying Deel’s HR and payroll teams, to updating Deel’s real-time risk assessment system and databases, and more.
While this vertical integration is an advantage around the world, it adds particular value in next-wave markets such as Italy, Mexico, and Switzerland, which have historically been deprioritized by incumbents for their relative size and scale. Deel’s consolidated stack allows global employers to offer the same high level of consistency and accountability to their workforce around the world, unencumbered by a precarious network of lagging local payment rails and unreliable third-party providers.
That vertical stack also eases the workload of global payroll teams by ensuring accurate payroll processing and standardized journal entries. Data from every country is presented in a consistent schema, streamlining review and reconciliation. The ability to have a single, comprehensive view of your entire international workforce — including contract workers, EOR employees, and direct employees — eliminates the hassle of having to switch between multiple point-solutions. By integrating directly into the payroll engine, this approach not only improves efficiency, but enables software-level margins.
2) Modularity: Infinite product wedges
“Nobody wakes up one day and says, ‘I would love to replace my entire HR stack.’ They’re like ‘This thing is broken and I need to resolve it.’” —Meltem Kuran Berkowitz, Deel head of growth
Deel’s services are unbundled by default. In contrast, many SaaS platforms and enterprise software suites — including Salesforce and Workday — often bundle their services or impose high costs for accessing individual modules or product features. Customers often come to Deel when they have a particular problem that needs to be solved, whether a task seemingly small, but essential, like obtaining a single O-1 visa for an executive, or complex, like replacing their entire global payroll operation.
Unlike most companies that rely on a single entry point to land customers before cross-selling to additional products, Deel has multiple, modular wedges — distinct entry points that serve as natural on-ramps for customers across different needs. This flexibility allows Deel to meet customers where they are, whether through EOR, contractor payments, mobility services, or other solutions, rather than forcing them into a predefined sales motion.
The Deel sales model is an open ecosystem that can work in tandem with a client’s existing products. This open strategy is particularly effective when selling into larger enterprises that already use a variety of tools. Many of Deel’s 36,000+ customers — Shopify, Klarna, Hermès, Coinbase, and Reddit among them — have originally been inbound customers for one IC or one EOR, then expanded their business over time.
This land-and-expand strategy, along with the breadth of Deel’s product suite, is a key reason the company’s business metrics look so different from incumbent payroll vendors. Whereas industry net-dollar retention is often in the low nineties (Paylocity, for example, reports 92%), Deel’s net retention has topped 120% every year since its inception.
Unlike traditional enterprise sales, which often rely on executive relationship-building and long negotiation cycles, Deel’s growth is driven by directly solving on-the-ground challenges for teams in the field. By addressing immediate operational needs, Deel embeds itself into organizations from the bottom up, making expansion a natural progression. The Deel team builds and prioritizes products based on customer demand and current data.
3) Acquisitions: M&A as a secret weapon
“It’s a delicate balance between ‘Do I build it myself, or do I buy it?’ …[When we’re acquiring a company], they need to be passionate. They need to push as though it’s their own project; they need to own it.” —Philippe Bouaziz, Deel Chairman and CFO
The prospect of making an acquisition has typically daunted early startups. With speed and an expansive product strategy in mind, Deel concluded the opposite: M&A can serve as an accelerator, injecting unique expertise, talent, product innovation, or essential infrastructure into the business. Deel has completed 10 acquisitions in its first six years of the business.
At a high level, Deel leans into acquisitions where they can tap top founders’ brainpower for a specific part of the business: Zavvy for talent and performance management, Assemble for compensation management, and PayGroup for Asia-Pacific payroll expertise, for example. Their approach to acquisitions spans several categories. Some deals focus on bringing in founders to run key business lines, whether tech-first entrepreneurs like Hofy or seasoned domain experts like those at PayGroup. Others are driven by technology, such as acquiring PaySpace for its payroll engine. While it’s common in tech for young companies to acquire teams to build ancillary or opportunistic product lines, it’s less typical for a company in its first five years to make strategic acquisitions across multiple dimensions as part of its product and business strategy.
These acquisitions have paid off. The acquisition of PayGroup in 2022 and PaySpace in 2024, for example, enabled Deel to expand its owned infrastructure, including native payroll engines in more than 100 countries. Last June, the acquisition of Hofy allowed Deel to start offering comprehensive global IT services and device lifecycle management.
As M&A has become a more important part of the business, Deel has operationalized and streamlined the process; one internal team is focused specifically on people integration, pre- and post-acquisition. Ultimately, the goal with each acquisition is to maintain a single code base, which bolsters Deel’s unified platform and reduces customer friction. However, here, too, Deel prioritizes speed: While most parent companies rewrite the acquired company’s front and backend code in their own platform before introducing a product to customers, Deel often opts to initially piggyback off the acquired company’s backend before re-writing it into their code base, cutting down the time it takes to deliver the product to customers.
4) Speed: Move fast and fix things
“Deal speed is constant momentum. You don’t delay things until tomorrow when you can get them done today.” —Alex Bouaziz, Deel CEO
When a customer makes a request or raises an issue, Deel’s top-down culture is to act — immediately. (Case in point: When a U.S.-based client reached out on Christmas Eve requesting to enroll 600 teachers in a benefits program by mid-February, Bouaziz had them onboarded before New Years Day.)
This urgency isn’t just a philosophy, it’s core to how Deel operates. A focus on speed and responsiveness has been scaled across the entire organization, ensuring critical business decisions are made without delay.
This is partially rooted in the company’s fully-distributed workforce: with employees spanning 150 countries, someone is always “on,” no matter the time or local holiday. But fix-it-fast has been the Deel way since the early days of the company, when Bouaziz and COO Dan Westgarth would halt a meeting, mid-explanation, to call a customer directly and work through an issue in real-time. If there’s a delay in getting somebody paid, somewhere in the world, it’s the CEO’s problem; his immediate response is to fix it and apologize within 24 hours. This principle has become an asset in winning clients away from competitors, according to longtime employees. “If they say they can deliver a product in six months, we do it in one,” says Deel’s head of growth. Once new business is won, that efficiency carries through to customer support, where the team’s north star metric is reducing friction, measured in support tickets and client escalations.
This bias toward action also extends to product development: Deel often works closely with customers to develop new products iteratively, starting with the feature that provides the most immediate value, then building it out to more comprehensively support the customer’s needs. While “selling the roadmap,” isn’t always considered a best practice among startups due to the way it can divert engineering resources, the trust Deel has established with customers means they’ve often committed to Deel’s new product before it’s fully feature-complete.
In departments like payroll and HR, where accuracy is non-negotiable, this iterative approach is applied with particular care. Rather than launching broad but imperfect feature sets, Deel prioritizes shipping focused, precision-driven solutions first, ensuring compliance and reliability before they expand functionality. This balance allows Deel to move fast without compromising the trust needed for high-stakes operations.
To ensure speed is matched by customer value, Deel engineers earn variable compensation tied to the revenue performance of the products they work on.
5) Automation: Eliminating friction, from hiring to retiring
“We’re increasing our automation rates progressively over time. A lot of other companies try to go full-speed AI from day 1, and we’ve seen a lot of those things fail miserably. We’re very principled about optimizing for client friction.” —Kobi Eldar, Deel head of product
Historically, the operations Deel seeks to streamline for their customers — hiring, HR, payroll, licensing, mobility, and compliance among them — generate a huge volume of paperwork and manual back office tasks. For global businesses, a maze of country-specific variables compounds that complexity.
What incumbents solved with humans and email, Deel solves with software. The company’s goal, increasingly with the aid of AI, is to transition human workers from operator — slogging through an endless queue of repetitive tasks — to auditor. These automations have benefits for both the customer and internal functions at Deel.
EOR onboarding, for example, traditionally requires workers to submit a large amount of information, typically over email, which is then manually verified by a human. In response, Deel built a self-serve workflow with automatic verification processes, resulting in higher margins and a streamlined customer experience. Meanwhile, Deel’s AI chatbot flags discrepancies in real time and can answer common questions; since launch, it has reduced customer support requests by 50%.
Payroll, in particular, has long been considered a human-in-the-loop business, with labor-intensive processes baked into its economics. Deel is breaking that assumption, automating functions like the bi-weekly payroll cycle, and shifting towards enterprise software margins. AI also helps Deel’s clients audit their localized contracts and identify potential compliance risks; access HR and compliance answers from 350+ experts in 150 countries; and get company-specific insights from their own workforce data, based on Deel’s built-in HRIS.
Software-boosted efficiency extends beyond product development — it’s reshaping sales and go-to-market, as well. One example: Last year, the team developed an AI tool that analyzes the transcript of every prospective client call, generates and captures keywords, and automatically categorizes the reasons the prospect opted not to move forward — everything from price to packaging to integration. Over the course of the year, with this AI analysis in place, Deel’s sales team improved their close rate by 8%.
But this shift isn’t just about making processes more efficient, it’s about fundamentally overhauling them. Unlike incumbents like ADP and SAP, whose legacy structures make it difficult to compete on a technical level, Deel has invested in owned infrastructure and unique software capabilities that systematically remove human dependency from traditionally manual cycles. By rebuilding core systems with software, Deel is eliminating human bottlenecks and positioning itself as an outlier in a category that has long resisted automation.
The $1 trillion opportunity: “Universal payroll rails of the world”
Deel is reshaping how businesses hire, pay, and manage talent across 150+ countries, replacing fragmented solutions with a tailored, all-in-one approach. This enables customization for businesses of all sizes: Smaller companies can leverage the platform as a full-stack workforce management platform, while large enterprises can integrate Deel’s infrastructure via white-labeled APIs. This flexibility unlocks new capabilities for workers and businesses, from instant payouts to treasury management. As Deel continues to expand its reach, its original vision remains: to remove operational barriers to global work.
