20VC: Deel CEO Alex Bouaziz on Raising $300M+ at a $17BN Valuation | Deel vs Rippling: WTF is Going On | Management Lessons from Ben Horowitz and Nik Storonsky | Deel's M&A Playbook: Lessons from 13 Acquisitions: What Works & What Doesn't
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Alex Bouaziz, CEO of Deal, joins the show to announce Deal's massive $300 million funding round at over $17 billion valuation, led by Ribbit Capital, Andreessen Horowitz, and Coatu. (05:48) Deal has reached incredible milestones including their first $100 million revenue month in September and over three years of profitability. (08:07) Bouaziz discusses navigating public litigation with competitors, the company's aggressive M&A strategy with 13 acquisitions, and his vision to transform Deal into a $100 billion company serving 100 million workers globally. The conversation covers Deal's unique approach to scaling globally, building internal infrastructure, and maintaining profitability while achieving hypergrowth.
- Main themes: Fundraising strategy, competitive dynamics in global payroll, M&A playbook execution, building for long-term market dominance, and scaling operations across 100+ countries
Speakers
Alex Bouaziz
Alex Bouaziz is the CEO and co-founder of Deal, a $17 billion global payroll and HR platform that processes over $1 billion in annual revenue. He previously went through Y Combinator and has built Deal into one of the fastest-growing B2B companies globally, completing 13 acquisitions in six years while maintaining profitability for over three years. He's known for his hands-on leadership style and strategic approach to global expansion.
Harry Stebbings
Harry Stebbings is the host of 20VC, one of the world's leading venture capital podcasts. He's also a venture capitalist and investor, known for his direct interviewing style and deep relationships with founders and investors in the startup ecosystem.
Key Takeaways
Build Sustainable Growth Over Hypergrowth
Bouaziz emphasizes that Deal has always prioritized sustainable growth over pure velocity, which has been crucial for customer trust. (57:12) When they raised their Series A, Deal had only burned $400K over 18 months despite raising $4.3M in seed funding. This approach builds customer confidence - companies don't want to put their payroll on a platform burning $300M annually with uncertain futures. The sustainable approach enabled Deal to sign 4-7 year contracts because customers trust their long-term viability, and their 17% EBITDA margins demonstrate financial strength that competitors burning heavily cannot match.
Master the Art of Strategic Acquisitions
Deal's acquisition playbook involves two key strategies that have driven their success across 13 deals. (44:18) First, they integrate the front-end within two months while rebuilding the back-end infrastructure, allowing sales teams to start learning and selling immediately. This parallel approach cuts integration time in half compared to traditional methods. Second, Bouaziz applies his father's principle: structure deals so both parties are happy five years later, even when you have the upper hand. This long-term thinking has resulted in hundreds to thousands of percent growth across their acquired companies.
Stay Hands-On as You Scale
Despite managing 7,000 employees globally, Bouaziz maintains over 20 direct reports and communicates daily with his leadership team. (17:12) He believes being hands-on is critical for spotting organizational gaps and maintaining customer connection. Rather than formal one-on-ones, he provides continuous feedback and enables his leaders by quickly addressing what's broken. This approach allows him to stay connected to customer problems and make rapid decisions about resources, prioritization, and organizational changes that traditional hierarchical structures would slow down.
Invest in Proprietary Infrastructure for Competitive Advantage
Deal's decision to build their own payroll infrastructure rather than partnering with existing providers was initially opposed by their CFO due to liability concerns, but became their most successful strategic decision. (61:07) Their employer of record product now generates over $250 million monthly because they own the entire infrastructure. The PaySpace acquisition for over $100 million accelerated this strategy by 5-10 years, providing global payroll infrastructure that took 15 years to build. This ownership model allows Deal to provide superior customer experience and control their destiny rather than depending on outdated partner systems.
Choose Investors Who Add Strategic Value Beyond Capital
Bouaziz strategically chose Ribbit Capital for this round after trying to get them invested since Series A, valuing their expertise and network over purely financial considerations. (06:35) He emphasizes that great investors help with board members, talent placement, and navigating complex situations through pattern matching from previous experiences. The quality of investor brand matters significantly for attracting top talent and future capital. Deal's board includes Ben Horowitz from Andreessen, who provides invaluable knowledge about scaling businesses and navigating wartime CEO challenges.
Statistics & Facts
- Deal achieved their first $100 million revenue month in September, marking a significant milestone for the company. (08:07) This demonstrates their massive scale and growth trajectory as they approach their goal of becoming a $100 billion company.
- The company has completed 13 acquisitions in six years, with 60% of their revenue now coming from cross-sell and expansion. (39:48) This aggressive M&A strategy has been central to their growth and market consolidation efforts.
- Deal has been profitable for over three years with 17% EBITDA margins, while burning only $400K over 18 months during their early days. (57:12) This sustainable approach contrasts sharply with competitors burning hundreds of millions annually.