Deel acquires South Africa-based PaySpace

Deel’s acquisition comes shortly after it announced it had bought Germany-based Zavvy, an AI-based ‘people development’ startup building tools for personalised career progression, training, and performance management. The Financial terms of the PaySpace acquisition were not disclosed.

PaySpace serves over 14,000 customers across 44 countries globally. Its clients include multinational corporations like Heineken, Coca-Cola Beverages, and Puma Sports. The recent acquisition by Deel, a USD 12 billion HR startup operating in over 70 countries, aims to enhance its market position in Africa.

Founded in 2007 as a cloud-based payroll and human resources platform, PaySpace aimed at streamlining the laborious payroll runs and backup procedures associated with traditional payroll and HR software prevalent at the time.

Within three years of its launch, PaySpace expanded its product reach to 11 countries. By 2022, this footprint had extended to 43 countries. That year, the company’s executives announced plans to further expand into Brazil and the UK. Sales of the company — whose clientele includes international and local blue-chip customers, ranging in size from one-person shops to enterprises with thousands of employees — have been growing by over 30% annually.

Africa expansion plans

The news also follows Deel’s acquisition of APAC payroll provider PayGroup. With the various buys, Deel claims that it now owns the full HR stack — entities, local teams (legal, HR payroll), and local payroll engines — across six continents. Deel’s ambition is to serve 100 countries with native payroll engines by 2028.

In a statement, officials from PaySpace said that like their company, Deel strives to evolve its offering through disruption. They set out to modernise the payroll industry, which was burdened by manual processes and stringent legislative and compliance requirements, much like Deel revolutionised global hiring.

Deel now owns over 150 entities globally and manages in-house, in-country payroll teams in over 70 countries, in addition to offering employer of record, contractor, immigration, HRIS, and performance management services.