Deel, a payroll startup accused of money laundering, prepares for IPO amid legal battle

Deel, a payroll and human resources startup founded by MIT alumni Alex Bouaziz and Shuo Wang, is preparing for a potential IPO as early as next year, according to CNBC. This follows a 70% revenue surge in December, pushing its annual revenue run rate to $800 million. The IPO news comes as Deel denies allegations of enabling money laundering, blaming a competitor for the lawsuit.”

Known for simplifying global hiring and payroll, Deel has expanded its investor base with two new major shareholders. A $300 million secondary share sale last year brought in General Catalyst and a sovereign wealth fund, which CNBC reports to be Abu Dhabi’s Mubadala Investment Company. The deal nudged Deel’s valuation from $12 billion to $12.6 billion, CNBC reported, citing sources familiar with the matter.

“Human resources software firm Deel said it has hit an annual revenue run rate of $800 million and is ramping up preparations to go public with a view to IPO as early as next year,” CNBC reported.

CEO and co-founder Alex Bouaziz told CNBC that Deel is focused on strengthening financial audits, compliance measures, and infrastructure as it prepares to go public. “We are getting ready to go out, potentially next year or a bit later,” Bouaziz said. Deel recently brought in two new board members: former Illumina CEO Francis deSouza and former Coupa CFO Todd Ford.

Bouaziz believes a public listing will help Deel establish itself as a dominant brand in HR and payroll software. “No one really [builds] a brand that you feel resonates with people,” he said. “Being a public company can reinforce that sentiment, be part of the story, and be part of the business.”

Despite its rapid expansion, Deel isn’t facing pressure from investors to go public. The company now employs around 5,000 people worldwide and continues to ride the wave of remote hiring, a trend that took off during the pandemic.

Jeannette zu Fürstenberg, managing director of General Catalyst, expressed confidence in Deel’s position, stating, “Deel’s focus on enabling large enterprises to navigate the complexities of a global workforce fits seamlessly with our mission to back bold ideas that create enduring value.”

Facing a Lawsuit Over Alleged Money Laundering

Amid its financial milestones, Deel is dealing with a legal battle. The company was recently hit with a lawsuit in a Florida court, alleging that it processed payments without proper licensing and facilitated money laundering linked to transactions worth at least $2.27 million. The lawsuit also accuses Deel of enabling payments to Russia in violation of U.S. sanctions.

“Against the backdrop of financial milestones and progress toward an IPO, Deel is currently facing litigation over claims that it facilitated money laundering transactions. Last month, Deel was served a lawsuit in a Florida court which alleges it processed payments without proper licensing and enabled money laundering in relation to illegal payment transactions worth at least $2.27 million made on behalf of a former client, Surge Capital Ventures. It also accuses Deel of facilitating payments to Russia in violation of U.S. sanctions.” CNBC reported.

Deel has dismissed the claims, calling them “riddled with baseless allegations, gross inaccuracies, conjecture, and downright falsehoods.” The company has filed a motion to dismiss, arguing that the lawsuit is part of a coordinated attack by a major investor in a competing HR software firm.

CNBC reports that the plaintiff’s lawyer, Thomas Grady, has ties to Rippling, a rival payroll software company. Deel is pushing back aggressively against the claims and remains confident about its legal position.

Bouaziz told CNBC he is “pretty confident” the lawsuit will be thrown out.

As Deel inches closer to a potential IPO, it faces a mix of momentum and legal hurdles. Whether the company can clear this roadblock and make its way to the public markets remains to be seen.

Founded in 2018 by MIT alumni Alex Bouaziz and Shuo Wang, Deel provides a platform designed for remote teams and businesses working with global remote contractors.  Deel’s services include localized compliance, automated payments, contract management, tax form templates, invoicing, receipts, and customer support. Deel’s promise has always been to simplify global hiring, making it easier for businesses to expand their reach.

Deel’s platform solves the largest logistical challenges that come with moving to a distributed, global workforce: payroll and compliance. Onboarding and paying workers across borders is complex, with specific currency and labor law requirements that vary by country. It can be both costly and time-consuming.

Deel gearing up for IPO in 2026