Gusto (company)

Gusto, Inc. is a company that provides a cloud-based payroll, benefits, and human resource management software for businesses based in the United States. Gusto handles payments to employees, and contractors and also handles electronically the paperwork necessary to help client companies comply with tax, labor, and immigration laws.[3] Gusto is operational in all 50 US states.[4]

Gusto, Inc.
FormerlyZenPayroll, Inc.
TypePrivate
Industrybusiness software industry Edit this on Wikidata
FoundedNovember 2011 (2011-11) (as ZenPayroll)
Headquarters
San Francisco Edit this on Wikidata
Area served
United States
Key people
Joshua Reeves (CEO)
Edward Kim (CTO)
Tomer London (CPO)
Lexi Reese (COO)
Mike Taylor (CFO)[1]
Danielle Brown (Head of People)
Number of employees
2,400[2]
Websitegusto.com

History

Gusto was part of Y Combinator's Winter 2012 batch.[5] The service launched officially on December 11, 2012 in California[5][6] by Joshua Reeves, Tomer London and Edward Kim.[7]

On June 12, 2013, Gusto announced support for paying contract workers, including making sure of tax compliance (by filing the relevant Form 1099 and other paperwork). This was touted by some technology writers as giving the company an advantage over competitors such as ADP and Paychex, whose payroll software was claimed to lack the flexibility to accommodate contract workers. The company also announced plans to launch services in Florida, Texas, and New York state.[8][9]

In August 2013, Gusto announced that it had crossed $100 million in payments processed annually, and was launching in Florida, Texas, and Washington state.[10] In September 2014, Gusto announced its application programming interface (API) and partnerships with over a dozen small and medium business (SMB) back-office service companies.[11][12] In December 2014, Gusto announced support for letting companies match employees' charitable donations.[13]

In April 2015, Gusto announced support for all 50 states.[4] In July 2015, Gusto announced that it had expanded its business and opened a new office in Denver, Colorado.[14] In September 2015, it was announced that ZenPayroll had changed its name to Gusto, and was broadening its focus to integrate health benefits and workers' compensation into its payroll software.[15] In 2016, the firm launched an ad campaign featuring Kristen Schaal playing a Gusto human resources representative.[16]

In 2019, Gusto announced the opening of its third location, the new office is located in New York City.[17]

In 2020, Gusto is making a push to sign up more accounting firms as partners and earn its People Advisory Certification.[18]

In June 2021, Gusto announced that it will now offer part of its service via an API to external platforms. The new product “Gusto Embedded Payroll,” will allow vertical SaaS companies to provide payroll support to their own customers.[19]

Funding

In December 2012, Gusto announced that, back in April 2012 upon graduating from Y Combinator's Winter 2012 class, ZenPayroll had raised the largest seed round for a Y Combinator startup. The total amount of $6.1 million was raised from investors including Box CEO and co-founder Aaron Levie, Yammer CEO and co-founder David O. Sacks, Dropbox CEO and co-founder Drew Houston, YouTube co-founder Jawed Karim, Yelp CEO and co-founder Jeremy Stoppelman, Badgeville CEO and co-founder Kris Duggan, SugarCRM CEO Larry Augustin, and Zuora CEO and co-founder Tien Tzuo, as well as Google Ventures, Data Collective, Sherpalo Ventures, and Salesforce.com.[5][6][20]

On February 19, 2014, Gusto announced a $20 million Series A funding round at a valuation of over $100 million. The round was led by General Catalyst Partners, with Kleiner Perkins Caufield & Byers also participating.[21][22][23][24]

In April 2015, the company secured $60M in Series B funding. The round was led by Google Capital.[25]

In December 2015, Gusto raised $50 million in an opportunistic round that valued the company at $1 billion.[26]

In July 2018, Gusto completed a $140M Series B funding. The round was led by CapitalG, Dragoneer Investment Group, T. Rowe Price and Y Combinator, followed by Kleiner Perkins, General Catalyst, Emergence, SWS Venture Capital, etc.[27]

In July 2019, Gusto raised $200 million at a $3.8 billion valuation.[28][29]

Reception

Venture Beat reported on Gusto's price hike on August 10, 2016, stating “Gusto rationalized the increase as the result of ... recent improvements, such as the launch of integrated health benefits, an 'enhanced' employee on-boarding experience that includes I-9 support and welcome emails, paid time-off tracking, and multiple pay rate tools.” [30] However, in a Gusto-issued press release on September 17, 2015, the company announced many of these features:[31] “For the first time ... with Gusto, employees can easily: — Learn about their benefits, enroll or make changes to their health plans, through their personal Gusto accounts. — Contact Gusto’s dedicated care team with their benefits-related questions. — Access their paystub and plan data in one place.” In 2014, when Gusto was named ZenPayroll,VentureBeat listed Gusto among the best back-office software for small businesses.[32] The New York Times has compared Gusto to larger payroll processors such as ADP, citing both advantages and disadvantages.[33] Gusto has been praised by TechCrunch and PandoDaily for offering an easy-to-use service to small businesses and companies using contractors.[8][9]

Product and pricing

Gusto's core product offering is payroll processing. As part of the core payroll product, Gusto offers employee onboarding (work authorization forms, direct deposit forms, employee information aggregation). Separately, Gusto offers employee health insurance, dental insurance, and vision insurance enrollment and administration. In addition, Gusto offers other employee-benefit and related products through third parties, including 401K and workers' compensation insurance.[34]

In 2020, Gusto has built more than 50 new products in the last year directed toward helping small businesses. Releases included customizable payroll reports, a simplified Paycheck Protection Program (PPP) Loan Forgiveness tracker and a streamlined PPP application report that’s been downloaded more than 80,000 times to date. Nationwide, Gusto enabled more than $2.5 billion worth of approved PPP loans.[35]

Gusto charges a per employee per month fee, similar to other software providers.[36]

Acquisitions
Date Acquired Company Country Expertise
May 2016 Rentobo United States Real Estate Management Tools
June 2021 Ardius United States R&D Tax Credits
July 2021 Symmetry Software United States Payroll APIs & Tax withholding Software
October 2021 RemoteTeam.com United States Automated Payrolls, Time-offs, Expense Management & Reimbursements

References
  1. Reeves, Joshua. "Welcome Mike Taylor, Gusto's Chief Financial Officer". Gusto Company News. Gusto. Retrieved 18 March 2023.
  2. "The Cloud 100 2022". Forbes.
  3. "About". Gusto. Retrieved September 23, 2015.
  4. "Which States Does ZenPayroll Support?". ZenPayroll. Retrieved May 21, 2015.
  5. Carney, Michael (December 11, 2012). "ZenPayroll raises YC's largest seed round from the Mt. Rushmore of Valley entrepreneurs". PandoDaily. Archived from the original on March 1, 2021. Retrieved January 20, 2015.
  6. Williams, Alex (December 11, 2012). "ZenPayroll Launches Cloud-Based Payroll Service With $6.1M In Seed Funding From CEOs At Yammer, Box, Yelp And Dropbox". TechCrunch. Retrieved January 20, 2015.
  7. "FinTech Profile: Gusto - the all in one people platform | Venture Capital". FinTech Magazine. 16 May 2020. Retrieved 2021-07-21.
  8. Williams, Alex (June 12, 2013). "ZenPayroll Now Gives Employers A Way To Pay Contractors That ADP Can't". TechCrunch. Retrieved January 20, 2015.
  9. Carney, Michael (June 12, 2013). "ZenPayroll adds support for contract workers, preps for expansion to Florida, Texas, and soon New York". PandoDaily. Archived from the original on January 13, 2021. Retrieved January 20, 2015.
  10. Carney, Michael (August 29, 2013). "ZenPayroll crosses $100M in payroll processed annually, launches in Texas, Florida, and Washington". PandoDaily. Archived from the original on January 12, 2021. Retrieved January 20, 2015.
  11. Carney, Michael (September 3, 2014). "ZenPayroll aims to unite the SMB back-office, integrates with a dozen other cloud-based systems". PandoDaily. Archived from the original on January 20, 2015. Retrieved January 20, 2015.
  12. Lawler, Ryan (September 3, 2014). "ZenPayroll Partners With A Dozen Other SMB Back-Office Tools". TechCrunch. Retrieved January 20, 2015.
  13. Novet, Jordan (December 16, 2014). "ZenPayroll now lets companies match employees' charitable donations". VentureBeat. Retrieved January 20, 2015.
  14. Wallace, Alicia (July 28, 2015). "Google-backed ZenPayroll plans to hire 1,750 people in Denver". Denver Post. Retrieved January 20, 2015.
  15. Novet, Jordan (September 17, 2015). "ZenPayroll changes its name to Gusto, starts offering insurance, workers' compensation". VentureBeat. Retrieved September 26, 2015.
  16. http://www.adweek.com/brand-marketing/ad-day-kristen-schaal-ultimate-hr-director-startups-fun-campaign-174024/ AdWeek
  17. "SMB payroll startup Gusto raises $200M Series D, plans R&D expansion to NYC". TechCrunch. 24 July 2019. Retrieved 2021-07-21.
  18. "Gusto expands People Advisory Certification program". Accounting Today. 2020-12-07. Retrieved 2021-07-21.
  19. "Gusto is now offering pieces of its service to other companies via API". TechCrunch. 30 June 2021. Retrieved 2021-07-21.
  20. Gage, Deborah (December 11, 2012). "Paychecks Move to the Cloud as Google, Salesforce Back ZenPayroll". Wall Street Journal. Retrieved January 20, 2015.
  21. Rao, Leena (February 19, 2014). "Cloud-Based Payroll App ZenPayroll Raises $20M From General Catalyst And Kleiner At A $100M-Plus Valuation". TechCrunch. Retrieved January 20, 2015.
  22. Carney, Michael (February 19, 2014). "Hockeysticking ZenPayroll grabs a $20M Series A, sets out to make you love payroll as much as its founders do". PandoDaily. Archived from the original on January 13, 2021. Retrieved January 20, 2015.
  23. Novet, Jordan (February 19, 2014). "Investors deposit $20M in ZenPayroll as the company eyes expansion". VentureBeat. Retrieved January 20, 2015.
  24. Gage, Deborah (February 19, 2014). "San Francisco Startup ZenPayroll Raises $20M, Finds Novel Ways to Lure Workers". Wall Street Journal. Retrieved January 20, 2015.
  25. "ZenPayroll Scoops up $60 Million Funding Round Led by Google Capital". Forbes.
  26. Alden, William (December 21, 2015). "Gusto Is Valued At $1 Billion In New Funding Round". BuzzFeed. Retrieved January 20, 2015.
  27. "Cloud-based payroll, benefits, and human resource management solution company - Gusto". mg21.com. 2021-04-18.
  28. Fuscaldo, Donna (July 24, 2019). "Gusto Amasses $3.8 Billion Valuation With Latest Fundraising Round". Forbes. Retrieved August 29, 2019.
  29. "Gusto is now offering pieces of its service to other companies via API". TechCrunch. 30 June 2021. Retrieved 2021-07-21.
  30. “Gusto Raising Prices for all Customers…”
  31. ”ZenPayroll Is Now Gusto, On a Mission to Help Companies Put People First”
  32. Grant, Rebecca (January 27, 2014). "The best back-office software for small businesses". VentureBeat. Retrieved January 20, 2015.
  33. Hardy, Quentin (September 3, 2014). "ZenPayroll Gives Small Business the Tech Tools of Big Business". New York Times. Retrieved January 20, 2015.
  34. "Gusto". Gusto. Retrieved 2018-07-10.
  35. Walden, Stephanie (2020-12-24). "7 Fintech-Led Covid Relief Efforts That Went Above And Beyond In 2020". Forbes Advisor. Retrieved 2021-01-12.
  36. "Gusto". Gusto. Retrieved 2018-07-10.
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