Deel - A $12B Company Built In 3 Years

Morning! It's Thursday, January 26th - Today, we're covering Google getting sued by the US government, 4 US cities about to crash, Tesla's best quarter ever, SBF investing $400m into an unknown hedge fund manager, and HR company Deel becoming a $12B company in 3 years.

- Callum

FEATURE

How To Build A $12B Company In 3 Years

Deel just announced its new $12b valuation.

In just 18 months, Deel broke records as the fastest company to reach $100m (Recently beat out by Wiz...more on that soon). Now, just 6 months later, it's at $295m ARR.

So what's the business?

Deel makes it easy for businesses to hire employees internationally. They do this by setting up employment infrastructure in over 150 countries, hiring your employees for you via Deel Inc, and assuming legal responsibility for them.

In exchange, you pay Deel $49/mo to help manage external contractors and $599/mo to help manage full-time employees.

The Numbers

The company was founded in late 2019 and caught lightening in a bottle. Look at these revenue numbers:

  • 2020: $4,000,000

  • 2022: $57,000,000 (14.25x YoY)

  • 2023: $295,000,000 (5x YoY)

It just announced a $30m round at a $12b valuation, but they didn't need the money. They still have ~$500m in the bank from previous rounds of funding. In total they've raised at least$630m.

So what?

Deel is an innovative business, but they aren't original, and you don't need to be. In fact, the best way to win big is by being a fast follower. Take a look:

  • Deel took its playbook from Papaya global (raised $444m) a direct competitor founded 3 years earlier in 2016.

  • Papaya proved out a viable business model for global workforce compliance and Deel improved upon it by building its own 'employer of record' entities in every market, whereas Papaya Global outsources this service.

  • Papaya Global is now valued at $3.7b compared to Deel's $12b.

HEADLINES

Google Sued By The US Government

> Google is being sued by the US government over its alleged monopoly of the US advertising market.

> 4 US Cities will suffer a 2008 level home value crash including San Jose, San Diego, Austin, and Phoenix, Arizona. Goldmans Sachs expects a decreases of more than 25%.

> Tesla reports best ever fourth-quarter revenue for 2022 with revenue of $24.32b.

> Tesla plans $3.6b factory expansion to keep growing its lithium-ion battery and electric-truck businesses in Nevada and employ 3,000 additional workers.

> McDonald’s, In-N-Out, and Chipotle are spending millions to block raises for their workers.

> Sam Bankman-Fried invested $400m into an unknown hedge fund manager just 2 years out of college shortly before FTX collapsed. An unknown hedge fund manager

> IBM cuts 3,900 jobs as part of an asset divestment after missing annual cash target.

ON TREND

Is Google Is Royally Screwed?

The US justice Department and eight states sued Google, calling for the break-up of the search giants control of the $250b search advertising market. Here's the finer points:

  • The latest complaint alleges that Google used its incumbent power and its Android operating system to lock up the search market, denying competitors "vital distribution, scale, and product recognition."

  • Google argues that its search deals - including agreements with Mozilla and Apple to feature Google search in their browsers - don't prevent users from trying other engines.

  • See the release from the Justice Department here.