Global payroll provider Share plans to take $120 million of its own money off the balance sheet to support startup payroll after the closure of Silicon Valley Bank. It partners with Andreessen Horowitz (a16z) and Y Combinator – both investors in Deel – to provide the support to customers.
The Federal Reserve just announced that Silicon Valley Bank depositors, both insured and uninsured, will be fully protected – leading to collective relief across the tech ecosystem. Depositors were healed when businessroundups.org interviewed the co-founder and CEO of Deel Alex Bouaziz, whose initial reaction to the news was: “We’ll see what happens, you can never be quite sure. But in the meantime, we’re done with our customers, and customers now and whatever we can do to help, we’ll be there.
He later added: “It is amazing that all savers will be made healthy. Until tomorrow morning when all funds will be available, founders must remain cautious and alert to ensure that all employees are paid.
Part in particular is not banked with the SVB: because it is active in more than 100 countries, has more than 450 bank accounts and has treasury management in-house. Deel paid a fine, Bouaziz said, to take the money out of his accounts, but hopes that fine will be waived.
The goal of Deel’s $120 million lifeline is to help companies run payroll for the next two cycles “with minimal disruption.” Businesses that need help can fill out an application form and submit an application through Share, which says it will help with both employee and contractor payroll for current clients, as well as some new clients.
“We’ve released some of our money because it’s our responsibility to help other companies, but we have to be very selective,” Bouaziz said. “Because we are already in the payroll system, we have ways to achieve good terms.”
Before the decision was announced, dealmakers and companies across the country were figuring out ways to help startups earn the payroll. With the government promising relief, the effort is now more useful as a back-up plan in case problems arise between now and Monday morning. The terms of Deel’s cash offers are not clear at this time; making it difficult to compare the option with the money invested by the SVB that is said to be available for founders from Monday morning.
Deel appears to be working on a founder-friendly deal, with Bouaziz adding: “The goal here is not to make money. It’s more about helping people and building real trust in the market as a leader in payroll.”
Brex announced yesterday that it is seeking to raise capital for an emergency line of credit this weekend after receiving $1 billion in interest. CEO Henrique Dubugras declined to comment on how much capital has been committed to the line of credit so far, but during the latest call with businessroundups.org, he said he is having back-to-back calls to secure funds. It’s unclear how his fundraising strategy has changed given the regulator’s most recent update.
Bouaziz said that “the question is not that interesting to us because what we really want to do is help people.”
Share, which has raised nearly $680 million since its inception in 2019 and was last valued at $12 billion, claims it has been profitable since September. It has more than 450 bank accounts around the world and lists JPMorgan Chase and Citibank as two of its “primary banking partners,” according to Bouaziz.
In January, the fintech-turned-HR outfit revealed it had hit $295 million in annual recurring revenue (ARR) by the end of 2022, a 417.5% increase from $57 million in ARR at the end of 2021. At the time, Share said it had more than 15,000 customers, including Nike, Subway, Reebok, Forever 21 and Klarna. Today, Bouaziz said the company has nearly 18,000 customers. Also in January, Share acquired Capbase for an undisclosed amount in a cash and stock deal, marking its entry into the asset management space.
