Deel has closed its 5th acquisition this year. Here's how its CEO decides which companies to buy.

• Deel CEO Alex Bouaziz told BI he considers product, people and tech when picking acquisition targets.
• On Thursday, Deel announced it acquired Assemble to boost its all-in-one HR platform capabilities.
• It's Deel's fifth acquisition in 2024 and 10th since its 2019 launch.

When Alex Bouaziz, the cofounder and CEO of Deel, lines up his next acquisition, he considers three core criteria: product, people, and tech.

Deel needs a clear M&A strategy. The global HR platform has now acquired 10 companies since its 2019 launch. And, on Thursday, it announced its fifth acquisition of the year — Assemble, a compensation management and analytics startup.

Completing acquisitions so frequently means Deel needs a large net to identify the right target.

"For every company we acquire, we speak to 1,000," Bouaziz told Business Insider. "So it's definitely a small ratio of acquisition to targets."

He added, "It's super important for our long-term strategy to pick the best companies in their space, bring them into our product suite, rebuild, and innovate together as a team with a lot more resources."

Deel plans to integrate Assemble's tech within its talent management HR, AI, and payroll tools for an all-in-one platform. The company says the acquisition will help it become a platform that offers payroll, compensation, performance, and other HR tools all in one place.

Acquisition spree

Earlier this year, Deel acquired Zavvy, a German-based people development platform; PaySpace, a payroll company; Hofy, a software firm; and Atlantic Money, a fintech.

Some of those deals have focused on increasing the time of getting a product to market, instead of building it in-house.

Bouaziz said other acquisitions aimed to bring specific talent and skills into Deel, a type of M&A known as aqui-hires. As the company scales rapidly, Bouaziz said it can often encounter a skills gap.

"The one thing that, as we build, we sometimes lack is true knowledge in all areas," he said. "Bringing their brains and their entrepreneurial spirits and bringing them next to us in terms of building innovation and making it better is something that is super positive for the company."

Deel also looks at company culture and integrating tech stacks when picking acquisition targets.

"Even if the product is amazing, even if they are the best of the best, if they don't align with our internal culture and how we see the world in terms of what we want to build for our customers, it's typically not going to work," Bouaziz said. "We would never do an acquisition where the founders and myself didn't see eye to eye in terms of culture."

Post-acquisition, Bouaziz said he typically has the founders of the acquired business report to him to help smooth the transition.

HR tech boom

Deel has grown significantly since it was founded more than five years ago by Bouaziz and Shuo Wang, who met while studying at MIT.

Bouaziz says the company now has over 35,000 customers and has been profitable for the last two years. Deel is valued at $12 billion and has raised $650 million since it was founded.

The company has also grown to over 4,000 employees worldwide in over 100 different countries. It operates as a remote-first company with a work-from-anywhere option.

"The world kind of went crazy with COVID, and I think a lot of people realized that there's enough talent everywhere, and we really wanted to build that infrastructure," said Bouaziz.

Its journey as one of the fastest-ever growing software companies hasn't always been smooth. In March 2023, Business Insider spoke with more than 30 current or former Deel workers about the HR company's rapid scaling, which some described as a grow-at-all-costs approach that required working long hours. Some employees said they were misclassified as independent contractors, which Deel disputed.

Deel reached $500 million in annual recurring revenue in March — and it sees even more scope for growth. Bouaziz says HR tech needs and international hiring have been on the rise for years, creating demand for services like Deel's.

"I think we're a good example of a company that's leading the way on how you get to bring the best people together in order to build the best product for your customers," Bouaziz said.