Human resources (HR) startup Deel is expanding its portfolio by acquiring PaySpace, an African-based payroll and HR software company. This acquisition, which is Deel’s largest to date, comes less than a week after it acquired Zavvy, a Munich-based artificial intelligence (AI) startup developing tools for personalized career progression, training, and performance management.
Based in Johannesburg, PaySpace has an extensive customer base of over 14,000 clients using its software and services in 44 countries across Europe, Latin America, the Middle East, and Africa. Notable clients include multinational corporations such as Heineken, Coca-Cola Beverages, and Puma Sports SA. The acquisition by Deel, a $12 billion HR startup operating in over 70 countries and specializing in talent hiring, payment, and management, aims to strengthen its presence in Africa.
PaySpace, founded by Bruce, Clyde, and Warren Clark together with George Karageorgiades in 2007, doesn’t fit the traditional model of a venture-backed startup. It secured undisclosed financing from Sage subsidiary Netcash in the previous year. Despite this, it has been a bootstrapping success story, succeeding by creating a cloud-based payroll and human resources platform to simplify the complex payroll runs and backup procedures associated with traditional payroll and HR software.
Within three years of its founding, PaySpace expanded to 11 countries, and by 2022, it had extended its reach to 43 countries. The company’s success has seen its sales grow by over 30% annually. Deel also recently announced that it has crossed $500 million in annual recurring revenue (ARR), up from $290 million at the end of 2022.
Deel’s CEO and co-founder Alex Bouaziz said the company now owns the full HR stack—local teams and payroll engines—across six continents, thanks to its acquisitions, which include PayGroup, an APAC payroll provider. Deel aims to serve 100 countries with native payroll engines in the next four years. In a statement, PaySpace Director Clyde van Wyk praised Deel’s disruptive approach to evolving its offering, an approach that PaySpace shares.
Currently, Deel owns over 150 entities worldwide, manages in-house in-country payroll teams in more than 70 countries, and offers a range of services, including Employer of Record, contractor, immigration, HRIS, and performance management services. Deel’s acquisition of PaySpace will help the company push into enterprise HR, boosting its customer base, which already includes clients like Klarna, Shopify, and Hermes.
This acquisition highlights a growing trend of acquisitions involving Africa-founded companies and global counterparts, indicating the growing influence and recognition of African startups on the global tech stage.
