Deel, the HR startup valued at $12 billion, is making strategic strides in the global market with its latest and largest acquisition to date. On Tuesday, the company announced its acquisition of PaySpace, an African-based payroll and HR software and services firm, solidifying Deel ’s position in the industry and marking another step in its expansion journey.

The financial terms of the PaySpace acquisition were not disclosed, but it follows closely on the heels of Deel’s recent acquisition of Munich-based Zavvy, an AI-driven “people development” startup. Deel, with its $500 million in annual recurring revenue (ARR) and positive EBITDA status since September 2022, remains well-funded with $600 million still in the bank, laying the groundwork for potential IPO plans in the 2025/2026 timeframe.

Johannesburg-based PaySpace, founded in 2007 by the Clark brothers and George Karageorgiades, has grown into a significant player with over 14,000 customers across 44 countries, serving multinational corporations such as Heineken, Coca-Cola Beverages, and Puma Sports SA. Despite having secured undisclosed financing from Sage subsidiary Netcash, PaySpace stands out as a bootstrapping success story in the HR tech landscape.

PaySpace’s cloud-based payroll and HR platform, initiated to streamline traditional payroll processes, has expanded steadily, reaching 43 countries by 2022. The company’s growth trajectory, with annual sales increasing by over 30%, positions it as an attractive asset for Deel, aiming to strengthen its footprint in Africa.

Deel ’s CEO and co-founder, Alex Bouaziz, emphasized the significance of the PaySpace acquisition, stating, “We were their customer, running payroll in 10 countries using PaySpace… Theirs is one of the best technologies we’ve ever seen.” Deel, having acquired APAC payroll provider PayGroup, now claims ownership of the complete HR stack across six continents, with PaySpace’s 45 payroll engines complementing its global presence.

The acquisition aligns with Deel’s broader ambition to serve 100 countries with native payroll engines within the next four years. With over 150 entities globally, in-house in-country payroll teams in more than 70 countries, and a suite of HR services, Deel is poised to make a substantial push into the enterprise sector.

This move also reflects a larger trend over the past 18 months, showcasing a growing interest in African-founded companies by global counterparts. Deel’s acquisition of PaySpace follows in the footsteps of notable deals involving companies like BioNTech, InstaDeep, Medius, Expensya, and Stripe’s acquisition of Paystack, underlining the increasing prominence of African startups on the global stage.