Global payroll provider toptechtrends.com/tag/deel/”>Deel plans to provide $120 million of its own cash off its balance sheet to support startups’ payroll operations in the wake of Silicon Valley Bank shutting down. It has teamed up with Andreessen Horowitz (a16z) and Y Combinator – both of which are investors in Deel – to offer the support to customers.
The Federal Reserve just announced that Silicon Valley Bank depositors, both insured and uninsured, will be fully protected – which led to collective relief throughout the tech ecosystem. Depositors were made whole as TechCrunch was interviewing Deel co-founder and CEO Alex Bouaziz, whose first reaction to the news was that: “We’ll see what happens, you can never be fully certain. But in the meantime, we’re ready with our customers, and customers right now and whatever we can do to help we’ll be there.”
He later added: “It’s amazing that all depositors will be made whole. Until tomorrow morning when all the funds will be available, founders need to stay cautious and stay alert to ensure all employees get paid.”
Deel, notably, is not banked with SVB: because it operates over 100 countries, it has over 450 bank accounts and has an in-house treasury management. Deel paid a penalty, Bouaziz said, to withdraw the cash from its accounts but is hoping that penalty will be waived.
The goal of Deel’s $120 million lifeline is to help businesses run payroll for the next two cycles “with minimal interruptions.” Companies that need assistance can fill out a request form and apply through toptechtrends.com/deel.com”>Deel, which says it will help with both employee and contractor payroll for current customers, as well as some new customers.
“We freed up some of our cash because it’s our responsibility to help other companies, but we have to be very selective,” Bouaziz said. “Because we’re already in the payroll system, we have ways to achieve good terms.”
Before the decision was announced, dealmakers and companies all over the country were working to find ways to help startups make payroll. With the government now promising relief, the efforts are now more useful as a back-up plan in case any hiccups occur between now and Monday morning. The terms of Deel’s cash offers are not clear right now; making it hard to compare the option with the SVB-banked cash that is said to be freed up for founders starting Monday morning.
Deel appears to be working on a founder-friendly deal, with Bouaziz adding “the goal here is not for us to make money. It’s more to help people and genuinely earn trust in the market as a payroll leader.”
Brex announced yesterday that it is trying totoptechtrends.com/2023/03/11/brex-ceo-is-trying-to-raise-over-1-billion-in-a-weekend-for-svb-related-bridge-loans/”> raise capital for an emergency credit line this weekend after receiving $1 billion in interest. CEO Henrique Dubugras declined to comment on how much capital has been committed for the credit line thus far, but, upon last chat with TechCrunch, said he’s on back to back calls trying to get funds locked down. Its unclear how his fundraising strategy may have changed given the regulator’s most recent update.
Bouaziz said that “demand is not that interesting for us, because what we actually want to do is help people.”
Deel, which has raised nearly $680 million since its 2019 inception and was last toptechtrends.com/2022/05/11/fueled-by-the-remote-work-revolution-deel-more-than-doubles-valuation-to-12b-with-new-raise/”>valued at $12 billion, claims that it has been profitable since September. It has over 450 bank accounts around the world, citing JPMorgan Chase and Citibank as two of its “primary banking partners,” according to Bouaziz.
In January, the fintech-turned-HR outfit revealed that it had toptechtrends.com/2023/01/23/remote-work-revolution-helps-deel-reach-295m-in-arr/”>reached $295 million in annual recurring revenue (ARR) by the end of 2022, up 417.5% from $57 million in ARR achieved at the end of 2021. At that time, Deel said it had more than 15,000 customers, including Nike, Subway, Reebok, Forever 21 and Klarna. Today, Bouaziz said the company has almost 18,000 customers.Also in January, Deel acquired Capbase for an undisclosed amount in a cash and stock deal, marking its entry into the equity management space.
toptechtrends.com/2023/03/12/deel-makes-over-120m-of-its-own-cash-available-to-support-customers-affected-by-svb-crisis/”>Deel makes over $120M of its own cash available to support customers affected by SVB crisis by toptechtrends.com/author/natasha-mascarenhas/”>Natasha Mascarenhas originally published on toptechtrends.com/”>TechCrunch
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