Gusto CEO Josh Reeves and Guideline CEO Kevin Busque discuss at Gusto’s San Francisco headquarters.
Elliott Morin | Gusto
Gusto, a startup with payroll and human assets software program, stated Wednesday that it has agreed to purchase Guideline, a startup specializing in company retirement plans. Terms of the deal weren’t disclosed.
Founded in 2011 and primarily based in San Francisco, Gusto is among the many world’s most respected corporations backed by enterprise capitalists, with a $9.3 billion valuation.
Gusto initially was named ZenPayroll and offered software program that purchasers might use to run payroll for his or her workers. In 2015, the corporate rebranded to Gusto because it began promoting medical health insurance and staff’ compensation.
Since 2016, Gusto has additionally provided 401(okay) retirement plans by way of a partnership with Guideline. The relationship is not unique, although. Organizations may arrange Guideline plans by way of various payroll corporations, together with ADP, Block, Intuit, Paylocity, TriNet and privately held Rippling.
Those integrations will not be going away after the acquisition closes, Guideline’s co-founder and CEO, Kevin Busque, stated in an interview with CNBC.
Both Gusto and Guideline goal small companies.
Guideline, based in 2015, has over 400 workers. In 2021, traders valued it at $1.15 billion. Gusto has greater than 2,800 workers, with over $500 million in annualized income as of 2023. Guideline’s annualized income as of January totaled $140 million.
Gusto is in enlargement mode, with plans to add 150,000 new purchasers this yr.
“That’s a small number relative to the 6 million employers in the U.S., and we have work to do,” Josh Reeves, Gusto’s co-founder and CEO, advised CNBC. Gusto’s buyer depend sits above 400,000 right this moment, and the corporate focuses primarily on the U.S.
Gusto hopes to promote Guideline companies to extra of its purchasers after the deal closes, with out worrying about income sharing. It will even pursue enlargement in states which have handed mandates for employers to present staff with retirement plans, Reeves stated.
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