Coatue Expected to Invest in Remote Hiring Startup Deel at $5.5 Billion Valuation

Deel, a startup that develops payroll tools to help companies hire remote workers internationally, is in discussions to raise a new round of funding at a valuation of $5.5 billion, said four people with direct knowledge of the round. Coatue Management, the New York-based investment firm that has raised over $16 billion for private investments since 2018, is expected to lead the round, the people said.

San Francisco-based Deel’s software helps companies hire international workers by creating contracts and payroll systems that are compliant with the laws of countries outside the U.S. Benefiting from the boom in remote work triggered by the coronavirus pandemic, Deel’s valuation has increased by 93 times since May 2020, when it was worth just $59 million, according to financial data firm PitchBook. Its latest financing reflects a broader trend in the VC industry: Fast-growing tech startups are raising funding rounds within months of each other as investors race to deploy capital from massive funds.

It couldn't be learned how large the latest round of funding will be. Deel was valued at $1.25 billion only five months ago, when it raised $156 million from Y Combinator’s Continuity Fund, Spark Capital and Andreessen Horowitz, Deel co-founder and CEO Alex Bouaziz told The Information in April. A spokesperson for Deel said the new “round is not nearly close to being closed,” but didn’t respond to a request for comment on the specifics of the new financing.